GOODYEAR INDIA LIMITED
GOODYEAR ANNUAL REPORT 2010
CONTENTS
CONTENTS
Board of Directors 02
01 BEHIND THE WHEEL
Goodyear as a Brand 06
Customers, Markets and 10
New Products
Manufacturing & Branded Retail 16
Employees, Partners & Society 20
02 WHERE WE'RE COMING FROM
03 REINVENTING THE WHEEL
04 HISTORY IN THE MAKING
05 FULL CIRCLE
Directors' Report 26
Corporate Governance
Management Discussion & Analysis
Audited Financials
06 WHEEL OF FORTUNES
GOODYEAR ANNUAL REPORT 2010
MESSAGE FROM THE MD
It's been a Goodyear!
MESSAGE FROM THE MD
Dear Friends,
2010 was a record breaking, award
winning, and a very satisfying year for
Goodyear India!
We performed our best despite the difficult
market conditions. We continued to rely on
our proven strategic principles, adhered to
our fundamentals and successfully steered
through the year.
The Indian economy has been experiencing
strong growth, with the Central Economic
Advisory (CEA) expecting up to 9% GDP
growth for 2011-2012. The strong
economy, coupled with improving
consumer confidence and a good monsoon,
helped spark strong demand for tractors and
passenger vehicles, the primary focus
segments for us at Goodyear India.
In 2010, our focus was on strengthening our
commitment to the customers in terms of
bringing new products, improved
interaction, and enhanced services. Our
dealers and end consumers were upbeat on
the new products launched- which included
a new farm tyre, 'Vajra Super' and also
'Packaged Tubes' for farm range of tyres.
These new products, supported by our
efficient supply chain network, helped us
1
increase our customer base and market
presence.
and is a rewarding reflection of the quality
of the products and services delivered by us.
Our company has always demonstrated
commitment to innovation and staying
'One Revolution Ahead'. At Ballabgarh, we
have successfully developed the
manufacturing capabilities for Radial Farm
Tyres which will be launched in 2011. We
will be amongst the first in the industry to
bring this technology to the market. It's our
ability to drive relevant innovations across
our product portfolio which ensures our
continued business success.
Going forward, in 2011 we will continue to
focus on our key business principles
which are Profitable Market Share,
Earnings/Cash, Customer Satisfaction and
Employee Engagement. Our endeavor has
always been to protect our stakeholders'
interest as a prime driver of business.
Rising raw material cost was a concern and
did impact the business but we remained
committed to bringing in new processes &
technological improvements to keep the
impact to the minimal, thus maintaining the
earnings at a healthy level.
We received several awards in 2010 from
our most elite customers such as Mahindra
& Mahindra, Maruti Suzuki, Toyota, M&M
Swaraj and International Tractors Ltd.
I also take great pride in the fact that
Goodyear India has been awarded the
prestigious “Superbrand” status for 20102011. This recognition speaks of the
business excellence of Goodyear as a brand,
Our associates are our most valued assets
and we shall continue to invest in enhancing
their skill set as I strongly believe that a
highly engaged, inspired and disciplined
workforce will bring the best results and
help us reach our objectives.
I would like to thank you all, my valued
shareholders, for the support you have
given to our company, for an incredible run
all these years & for making Goodyear so
successful. Wish you and your families all
the very best for 2011 and beyond.
RAJEEV ANAND
VICE CHAIRMAN & MANAGING DIRECTOR
01
BEHIND THE WHEEL
Board of Directors
ON THE GREEN TEAM
In 2010, Goodyear's breakthrough concept
tyre made with BioIsoprene™ technology that
uses renewable biomass, was awarded the
prestigious “Environmental Achievement of
the Year Award”.
GOODYEAR ANNUAL REPORT 2010
BEHIND THE WHEEL
BEHIND THE WHEEL
MR. PIERRE ERIC
COHADE
Chairman
Mr. Pierre Eric Cohade is president of The Goodyear Tire &
Rubber Company's Asia Pacific region. Mr. Cohade was
named to the position in October 2004. Prior to joining
Goodyear, Mr. Cohade worked globally in 4 continents
where he accumulated a proven track record in turning
around businesses, building organizations and placing
them on a growth trajectory.
MR. RAJEEV ANAND
Vice Chairman and
Managing Director
Mr. Rajeev Anand has been associated with the Company
for over 29 years, in various executive capacities, including
as Manufacturing Director - ASEAN & India and Director
Manufacturing & Strategic Initiatives - India. Prior to his
appointment as whole time Managing Director of the
Company , Mr. Anand was holding the position of Chief
Operations Officer.
Mr. Cohade started to work for Eastman Kodak in the USA
as a financial analyst in 1985 and subsequently held
business management and executive positions in Brazil,
Mexico, the United States, Singapore and Switzerland. Mr.
Cohade was named General Manager of Worldwide
Consumer Films in 1996 and assumed leadership of the
Asia Pacific region for Kodak's Consumer Imaging
business in 1999.
Mr. Cohade was named Chairman of Kodak's Europe,
Africa, Middle East and Russia Region in 2001. In 2003,
Groupe Danone chose Mr. Cohade to run its global Water
and Beverage division, based in Paris, France. Mr. Cohade
refocused the business to ensure that Danone remains a
global leader by improving margin and either holding or
gaining market share in all markets targeted by Groupe
Danone's competition.
Mr. Cohade was governor of the American Chamber of
Commerce in Shanghai and is a member of the Women's
Forum Global Advisory Council. In 2008, Mr. Cohade was
awarded the "Magnolia Award" from the Shanghai
Municipal Government for his civic leadership and
business contributions to Shanghai's development. He
was named Overseas Economic Advisor to the Mayor of
Dalian. Mr. Cohade received a degree in business
management from the CERAM School of Business in
Sophia-Antipolis, France, in 1984 and an MBA from the
Penn State University in 1985.
3
A native of Barcelonnette, France, Pierre speaks French,
English, Portuguese and Spanish.
MR. R V GUPTA
Director
Mr. R V Gupta, a 1962 batch IAS officer, has served the
Govt. of India at the levels of Special Secretary (Ministry of
Finance), Secretary (Ministry of Food) and Addl. Secretary
(Ministry of Chemicals & Fertilizers). Mr. Gupta has also
acted as Principal Secretary to Govt. of MP. Mr. Gupta is
former Dy. Governor of RBI and was closely involved in the
economic reforms process. After retirement, Mr. Gupta
acted as Chairman of the RBI Committee on Agriculture
Credit. Mr. Gupta was also associated with Deutsche Bank
as Chairman of local advisory board for India and also
holds various other Board Level Positions in the industry.
MR. C. DASGUPTA
MR. BRAD LAKHIA
Director
ALTERNATE DIRECTOR
Mr C. Dasgupta served as India's ambassador to China and
to the European Union, among other posts, during his
career in the Indian Foreign Service. Mr. Dasgupta is
currently a member of the Prime Minister's Council on
Climate Change, a Distinguished Fellow at TERI, and a
member of the UN Committee on Economic, Social and
Cultural Rights. He was awarded the Padma Bhushan by
the President of India.
Mr. Brad Lakhia is the Alternate Director to Mr. Pierre E
Cohade of the Company. Mr. Lakhia, aged 38 years, is a
Bachelor of Science in Business Administation Accounting,
and an MBA - Finance concentration. Mr Lakhia is also a
Certified Public Accountant, non - practicing (Ohio). He
has more than 13 years of experience across a broad array
of global finance functions and businesses in the areas of
treasury, accounting, financial planning, and divisional
finance.
MR. RAJIV LOCHAN
JAIN
Director
Mr. Rajiv Lochan Jain is a Chemical Engineer from IIT
Kharagpur and an MBA from the Whittemore School of
Business and Economics, UNH (USA). Mr. Jain was a
member on the Board of ICI India Limited, for over 12
years. Mr. Jain was the Managing Director from April 2003
to May 2009 and prior to this role he was the Chief
Operating Officer and Finance Director. Mr. Jain
successfully led the portfolio reshaping of ICI India from a
diversified Company to a focused player in the Paints
business. Mr. Jain was also the Chairman of both ICI's
Research Company in India and the joint-venture company
of ICI and Orica, Australia.
MR. YASHWANT
SINGH YADAV
Director - HR &
Corporate Affairs
Mr. Yashwant Singh Yadav, aged 53 years, is a Bachelor in
Law and an MBA with specialization in Human Resources.
He has more than 28 years of professional and diverse
experience in the entire gamut of Human Resources
Management with large multi-national and Indian
organizations including Ballarpur Industries, Goodyear
India, Escorts Ltd. and General Motors India at leadership
levels.
MR. JEAN PHILIPPE
LECERF
CHIEF FINANCIAL
OFFICER (CFO)
Mr. Jean Philippe Lecerf is Chief Financial Officer (CFO) of
the Company. Mr. Lecerf is a Finance Executive with over
23 years of experience in 7 countries. A Certified Public
Accountant with a broad international background, Mr.
Lecerf has a combination of strong accounting and finance
expertise with an in depth knowledge of business
dynamics. He has a balanced exposure to both start up
businesses and large established operations, and an
excellent ability to adapt to complex, demanding & volatile
environments.
HEAD LEGAL & COMPANY SECRETARY
MR. PANKAJ GUPTA
AUDITORS
Price Waterhouse
Chartered Accountants
Firm Registration Number: 301112E
COST AUDITORS
Dr. Ashok K. Agarwal
Membership Number : M-5691
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GOODYEAR ANNUAL REPORT 2010
WHERE WE'RE COMING FROM
02
WHERE WE'RE COMING FROM
Goodyear As A Brand
ON THE ROAD TO INNOVATION
In 2009, Popular Science magazine named Assurance
Fuel Max tyre one of the “100 Most Innovative Products
of the year” and it became the fastest tyre in Goodyear's
history to surpass sales of more than 1 million.
GOODYEAR ANNUAL REPORT 2010
WHERE WE'RE COMING FROM
WHERE WE'RE COMING FROM
A BRAND, A LEGACY
For over a hundred years, Goodyear has been at the forefront of tyre technology.
Through advanced research and manufacturing practices, Goodyear continues to push
the boundaries of innovation and remain One Revolution Ahead.
Goodyear's most recent achievement in 2010, was when the National Aeronautics and
Space Administration (NASA) and The Goodyear Tire & Rubber Company were honoured
with the R&D 100 Award for an airless tyre capable of transporting large, long-range
vehicles across the surface of celestial bodies such as the Moon or Mars. The 44th Annual
R&D 100 Awards ceremony, billed as the “Oscars of Innovation”, was held in Orlando,
Florida. The airless tyre is constructed out of 800 load bearing springs. It is designed to
carry much heavier vehicles over much greater distances than the wire mesh tyre (which
Goodyear also contributed to) that was previously used on the Apollo Lunar Roving
Vehicle (LRV).
In 2010, NASA and Goodyear were
honoured with the R&D 100 Award
for an airless tyre capable of
transporting large, long-range vehicles
across the surface of celestial bodies
such as the Moon or Mars.
In 2009, Popular Science magazine named Assurance Fuel Max tyre one of the “100
Most Innovative Products,” and Fuel Max became the fastest tyre in Goodyear's history to
surpass sales of more than 1 million. The Fuel Max technology reflects innovation that is
good for its customers, for its employees, for its business and for the world.
In 2009, Goodyear also celebrated 111 years since its founding, and 100 years of
operation in its aviation division by introducing 62 new products globally, of which some
were exclusively produced for the Indian consumers. Goodyear DuraPlus® with Tredlife
Technology™ was introduced in the Asia Pacific region to provide exceptional value for
smaller, fuel-efficient cars and offer extended wear up to 100,000 km with great
performance.
From developing the first all-weather tread design to Fuel Max technology, the first
promotional blimp flight to airless tyres for moon exploration, Goodyear has been
dedicated to developing new technologies that offer practical solutions for transporting
people and products from one place to another. From rolling out India's largest tyre to
becoming the first company to launch tubeless tyres in India, many of the product
concepts introduced by Goodyear in India have not only revolutionized the tyre industry
but have also become industry norms.
7
THE BRAND TODAY
When you look at the global Goodyear brand today with its thousands of breakthroughs, innovations,
inventions, firsts and groundbreaking improvements you're seeing a reflection of the bold, innovative and
down-to-earth character of the company's founders.
Throughout Goodyear's 113-year history, the core of
the brand has always been forward-thinking
innovation. To that aim, it is engaged in conversations
with all of its stakeholders to stay ahead of the curve every voice matters. It requires a delicate balance to
address the needs of associates, suppliers, customers,
consumers, investors, governments, regulatory
agencies, non-governmental organizations,
communities and civic groups, but through open
communication one is able to identify the trends,
issues and opportunities on the road ahead. By taking
all these voices into account, Goodyear is better able
to nurture sustainable growth based on innovative
solutions.
Brand Values
The most visible and recognized components of the
brand Goodyear, are the logo and the brand promise.
Goodyear's distinctive winged-foot trademark is
based on a statue of Mercury, which the founder kept
in his home. Known as a swift messenger for all the
Gods of mythology, Mercury's winged foot embodies
many of the characteristics for which Goodyear
products are known. Though the symbol has since
been altered over the years, it remains a recognizable
signature for Goodyear till this very day.
The brand promise “One Revolution Ahead” is the
sum total of all the essential aspects of tyre
technology, and in addition to providing quality tyres
and services, Goodyear also offers to the consumers a
heady mix of the best in line technology and services
that help the brand connect with consumers and give
it a cutting edge in the industry. Some of the recent
initiatives include:
Goodyear 'Travelogue'
It's the joy of road trips that makes the journey more
memorable than the destination. And what's better
than sharing the most special expeditions with fellow
travellers and explorers.
Celebrating the experiences of travellers and road
tripping enthusiasts, along with the joy of driving on
Indian roads, Goodyear initiated a unique concept
called “Goodyear Travelogue”. As the name
suggests, the “Goodyear Travelogue” serves as a
memoir or journal of the exceptional road journeys of
local travellers. It also provides tips on vehicle and
wheel care, road safety and how to prepare for road
trips, the best stopovers, and even shares unknown
routes to certain destinations to make road trips even
more exciting and memorable.
Goodyear partnered with several top lifestyle and
automotive magazines like Lonely Planet, Auto India,
Autocar India, Auto X, Man's World, and Top Gear to
share the colourful experiences of road trips made by
our avid travellers. From journey routes to scenic
views, the Travelogue says it all. Readers are invited to
pen down their road experience and send in pictures
of their trips.
The concept has been well appreciated by end
consumers too who regularly write in from all parts of
the country to the magazines participating in this
initiative.
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GOODYEAR ANNUAL REPORT 2010
WHERE WE'RE COMING FROM
Goodyear 'Wheel Care' concept
In its commitment to increase its reach and provide a better
driving experience to Indian customers, Goodyear
introduced the concept of Branded Retail Outlets.
and interactive elements help you fully appreciate the useful
car and tyre information, while the mini games are fun to
play with and scores can be easily shared with Facebook
friends.
Goodyear's 'Fast Aid' Program
With high standard tyre and car care services, the Goodyear
“Wheel Care” outlet aims to provide motorists with the
technical expertise that would help them get optimum
performance, safety and longer life from their tyres. Aside
from offering a wide-range of Goodyear tyres available for
all vehicle types, the Goodyear wheel care outlet also
provides motorists varied services such as tyre fitting, wheel
balancing, wheel alignment and oil change.
Goodyear has always gone an extra mile when it comes to
the safety of its customers. With cutting edge technology,
state of the art products and innovative services, Goodyear
continues to do justice to its commitment to safety on roads
with a 'Road Safety Assistance' program called "Goodyear
Fast Aid".
Fast Aid is a first of its kind program started by a tyre
company. The core objective of the initiative is to provide to
its customers, a safe driving experience with complete peace
of mind on road. With the purchase of 2 or more Goodyear
tyres, the customers get an annual Fast Aid subscription free.
Goodyear's 'Highway Helper'
Goodyear recently announced the launch of an exceptional
new iPhone application for Indian customers - Goodyear
'Highway Helper'. It is a free downloadable application from
Apple iTunes which allows fast access to important phone
numbers (emergency, police, tow trucks, taxis, dealers, etc.)
and also provides tyre dealer information, car maintenance,
vital information on troubleshooting guides, safe driving tips
and even offers interactive mini games.
Goodyear Highway Helper is a true utility tool as customers
can upload this mobile application to use as a safety fallback
if they get stranded on the road. The added informational
Goodyear India launched this initiative in collaboration with
RACE - India's leading on-road repair service provider. Tyres
or beyond, no one knows safety for its customers better than
Goodyear.
GOODYEAR INDIA - NOW A SUPERBRAND
In a market dominated by leading local brands, Goodyear
topped them all to be named the Business Superbrand in
India for 2010/11!
Superbrand is one of the world's largest brand evaluation
authorities that pays tribute to exceptional brands in 86
countries across continents.
9
This is a significant achievement as it is the first time
Goodyear displaced historically leading domestic brands. It
reflects the broad and thorough work that the marketing
team in India is driving.
Goodyear India garnered one of the highest scores amongst
an assortment of companies from various industries,
including all other tyre companies in India.
"
This is indeed a great recognition for us and a
reflection of all the hard work and dedication of
our associates and channel partners.
Thank you for helping us achieve Superbrand status.
"
Mr. Rajeev Anand
Vice Chairman and Managing Director of Goodyear India
03
REINVENTING THE WHEEL
Customers, Markets and New Products
ON THE RACETRACK SINCE 1901
In 1901, Goodyear co-founder and sales manager Frank
Seiberling offered young Henry Ford tyres for his new
race car to help Ford get started in racing. Goodyear
tyres appeared in the first race.
GOODYEAR ANNUAL REPORT 2010
REINVENTING THE WHEEL
REINVENTING THE WHEEL
Customers, Markets & New Products
VAJRA RANGE OF FARM PRODUCTS
Farm industry in India, the
growth continues
The tractor industry in India witnessed another good
year of growth. The growth is likely to continue in
coming years with key drivers being: higher level of
agricultural mechanization, increased usage of
tractors for non farm applications, easy availability of
finance and rapid pace of infrastructure
development. Higher level of tractor penetration in
the country has also impacted the replacement
markets with increasing park size which currently
stands at 4 million.
11
BRINGING THE
CUSTOMERS CLOSER
In 2010, Goodyear focused its strategy on
strengthening its commitment to the customers in
terms of new products, constant interaction, brand
visibility, customer support and services.
Continuous market visits
by Goodyear Teams
Goodyear Farm and Commercial teams made several
visits to dealers and customers across the country. The
management team during its visit, affirmed
Goodyear's intent of getting as close as possible to
the customers through regular and frequent
customer meets.
"
We need to anticipate the
customer's needs and cater
to them. Customer service
is our focus area of
improvement.
"
Mr. J.S.Gujral, VP Farm and Commercial Business
Extending the farm tyre range
In 2009, Goodyear introduced the Vajra range of farm
products comprising front farm and smaller sizes in
Rear Farm tyres (12.4-28 and 13.6-28) to cope with
changing requirements of the farm sector. The Vajra
Super brand of farm tyres was designed to solve the
Indian customer's problems of hard soil and sharp
thorns, without sacrificing the tyre's performance or
mileage.
After the grand success of the Vajra Super brand,
Goodyear, during the course of 2010, extended the
range to include sizes for Rear Farm Tyres in 14.9-28
and 16.9-28, thus catering to the large tractors
(Higher horse power) and replacement market as
well.
Vajra range of farm tyre products come with the
following special features of Vajra Super series
that make them ideally suited for hard soil:
2)
3)
4)
5)
Special tread compound with Wear Pads Resistance to thorn penetration
Pry Notch Easy Mounting and De
mounting
3T casing - more retreads
Wider and stronger lugs - Uniform tread
wear
Angular shaped lugs - self cleaning during
operations.
Goodyear also introduced new sizes for original equipment market (Mahindra & Mahindra) - front tyre sizes for
their low HP tractor: 8.00-18 and 5.20-14 notched rib.
These sizes have been developed with respect to the demand from OE for their small tractors which are targeted
to replace bullock carts and are also suitable for orchard and vineyard applications. 8.00-18 is fitted on the rear
and has a lug design, while 5.20-14 is the matching front with notched rib design.
Promotional Activities
Several promotional activities were conducted in both
soft soil and hard soil markets.
Goodyear participated in the “Kisaan Mela” at
Malout, Punjab to increase the Goodyear Brand
visibility in soft soil markets. In Patiala, Punjab,
Goodyear branding was visible in the complete
renovation and repainting of the Clock Tower, an
important landmark of the town.
Van campaigns and rural fair participations were
conducted in the hard soil markets of Gujarat and
Maharashtra respectively to introduce and encourage
trials of Vajra Super brand of tyres to customers.
A direct mailer campaign was successfully conducted
in hard soil markets of Madhya Pradesh and Andhra
Pradesh targeted at past customers of Goodyear
products in order to encourage trials of Vajra Super
brand of tyres.
The above initiatives were well received by the
customer. This was reflected in increased volumes in
the year 2010.
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GOODYEAR ANNUAL REPORT 2010
REINVENTING THE WHEEL
Packaged Tubes for Farm
Tyres
Protective Packaging
In 2010, Goodyear introduced genuine tubes,
encased in protective packaging, to complement its
range of tractor tyres, both for front farm and rear
farm tyres. This tamper-proof packaging protects the
tubes from getting de-shaped or damaged.
Prevention against Duplication
The protective packaging also safeguards against risk
of duplication in the marketplace, by carrying a
specially designed hologram.
The front farm tubes are encased in a pouch that
contains a hologram strip on both sides of the pouch,
the Goodyear hologram on the pack and a hologram
on the tube itself.
For Rear Farm tube sizes 12.4-28 and 13.6-28,
Goodyear developed attractively designed buckets,
also embossed with hologram, which were a huge hit
with the customers.
Rear Farm tube sizes 14.9-28 and 16.9-28 are
encased in cartons and also carry the hologram.
Product Launch
There was a pilot launch for the packaged tubes in
13
ASSOCIATE DEALER MEETINGS
states of Andhra Pradesh, Gujarat and Uttar Pradesh.
It was a soft launch, in order to assess the feedback on
packaging / pricing and other aspects of acceptability
in the market. The feedback from Associate Dealers
was overwhelming, which lead to full scale roll up by
your company in this product category.
What the associate
dealers had to say
Goodyear organised a series of dealer meetings
across ten cities - Bhubaneshwar, Pune, Lucknow,
Kanpur, Ghaziabad, Patna, Bhopal, Hyderabad,
Bangalore and Varanasi in December 2010. The
meetings were aimed at engaging closely with the
dealers and collecting valuable feedback on the new
products and marketing, distribution and pricing
approaches taken by the Farm and Commercial team
in 2010.
The entire range of farm products along with the
newly introduced sizes and packaged tubes were at
display during the meets. There were positive
feedbacks on the performance of Vajra Super in the
field and the role it has played in creating a pull
towards Goodyear farm products.
The Dealers appreciated the innovative tamper proof
packing and were confident that the tubes would
form an additional source of revenue for them as well
as the company. In all, the associate dealers were
positive about the impact of various initiatives being
taken by Goodyear to take the business to new
heights.
AWARDS & RECOGNITION
Farm Proprietary Award- M&M
Goodyear India Ltd was felicitated with the prestigious "Farm Proprietary Award" on 22nd July 2010, by Mahindra and Mahindra,
the largest tractor manufacturer across the globe. The winners were chosen on a well balanced criteria defined by Mahindra and
Mahindra based upon delivery, cost, quality and new product development.
On behalf of Goodyear India, the Award was received by Mr. Rajeev Anand, Vice Chairman & Managing Director and Mr. J.S. Gujral,
VP Farm and Commercial Business.“We're delighted to be in the honored list of Mahindra & Mahindra, one of the largest
tractor manufacturers in the world. We are very proud of our achievement.” said Mr. Anand.
Direct On Line Quality Certification- International Tractors
On 24th September, 2010, Goodyear India was the only tyre manufacturer amongst
the first batch of 44 suppliers (out of a total vendor base of 364) to be awarded “Direct
On Line Quality Certification” by International Tractors Limited.
This certificate is important as it recognizes Goodyear India as a quality supplier,
manufacturing and supplying in accordance to the strict quality and supply standards
laid out by ITL. Goodyear India has delivered on these parameters with the help of its
quality control team, efficient delivery performance by plants as well as its seamless
supply chain.
14
GOODYEAR ANNUAL REPORT 2010
REINVENTING THE WHEEL
"
Without Goodyear's
support we would have
lost production and sales
of tractors.
"
- Management team of Swaraj Tractors
15
Supply Chain Management
Performance Award - Swaraj
Goodyear India won the “Supply Chain Management Performance
Award” at the award function organized by Swaraj, another tractor
manufacturing division of Mahindra and Mahindra Ltd, on 29th
September, 2010.
On behalf of Goodyear India Ltd, Mr. J.S. Gujral (VP Farm and
Commercial Business) received the award from the management
team of Swaraj Tractors.
ON THE MOON
In 1971, Goodyear put the first tyre on the moon by
equipping the Apollo 14 Modular Equipment
Transporter or moon buggy with specially designed
tyres. One Giant Leap for Goodyear.
04
HISTORY IN THE MAKING
Manufacturing And Branded Retail
GOODYEAR ANNUAL REPORT 2010
HISTORY IN THE MAKING
HISTORY IN THE MAKING
Manufacturing and Branded Retail
50 YEARS OF SUCCESS
With people in its focus and quality at its heart,
Goodyear India Limited, Ballabgarh is going to
complete 50 years of success. With an urge to
perform and excel in every job and every role, the
momentum of Ballabgarh facility has created a strong
foundation for long-term sustainable competitive
advantage.
Major milestones in the successful 50 year
journey were:
1. Quality Recognition and Certification
17
-
“Self Certified Supplier” Award from TAFE
-
Zero PPM Status from New Holland
-
100% Global PPQ Audit Score
The Ballabgarh team achieved a perfect
score in the Product and Process Quality
audit for 2010. This achievement is
extremely important as it comes on the
heels of the start of production of Radial
Farm Tyres
-
ISO/TS 16949 Re-certification &
upgradation to 2009 Version
-
ISO 14001 Successful Audit
-
BIS certification of BMT & BLT tyres
2. Recognized by Lal Bahadur Shastri Academy
of Administration, Government of India, for
training of IAS Officers for 2010 batch.
BRANDED RETAIL
Goodyear Wheelcare
Goodyear is committed to satisfying all its customers
by meeting each one's needs with the right
performance at the right price. This commitment also
guides our retail business, allowing us to serve more
customers and understand their environment so that
we can develop the innovations they want and deliver
the services they expect.
The tyre retail business in India has become
increasingly intense. Consumer behaviour tends to
change rapidly and conventional marketing may not
be able to fulfill all their needs. Today's consumers are
looking for safety, long tread-life, fuel savings and
services that make travelling easier, while business
users think in terms of productivity, maintenance and
uptime. Meeting these expectations demands tyre
solutions that are dedicated, differentiated and
increasingly technologically and innovation-driven.
Goodyear Branded Retail Stores named as
"Goodyear Wheelcare", offer a wide array of
choices to consumers with all the latest wheelcare
services such as tyre purchases, wheel alignment and
balancing, nitrogen gas filling, alloy wheels/
accessories, rim straightening etc. They can also find
competitive products in these stores, compare the
products, and hence make informed decisions.
Goodyear has two distinct formats of BRO (Branded Retail Outlets)
GOLD & BLUE. Each format is designed keeping in mind the specific
requirements of today's dynamic consumer and the latest business scenario.
Gold
BRO
A.
B.
C.
D.
E.
Premium ACP signage
Customer lounge with sofa set
Tyre & alloy rack
3 consumer promotions in a year
1 petrol pump tyre safety camp
and other strategic retail promotion
activities
Blue
BRO
A.
B.
C.
D.
Backlit flex signage
2 consumer promotions in a year
1 training session for the staff
1 training session on business
management
Goodyear has also tied up with Bharat Petroleum Corp Ltd to open Goodyear's branded
retail outlets at select petrol pumps across country. Two of such stores are under
construction and are being prepared for launch soon at Chandigarh and Jaipur.
18
GOODYEAR ANNUAL REPORT 2010
HISTORY IN THE MAKING
Expansive Foot Print
In 2010, Goodyear India had Wheelcare outlets in 20
cities. Expanding its presence and reaching out to all
its consumers, Goodyear outlets are now present in
36 cities. Some of the cities added include Tirpuri,
Coimbatore, Hosur, Satara, Navi Mumbai, Surat,
Sirsa, Korba and Chandigarh. With convenient
locations nationwide, consumers will find great deals
on tyres and premium services, with highly trained
staff ready to give the right information to help them
make the best purchase for their tyres.
Jallandhar
Chandigarh
Patiala
Faridabad
Gurgaon
Delhi
Ghaziabad
Noida
Lucknow
Ludhiana
Sirsa
Jaipur
Training
At Goodyear we believe in partnering and meeting
the challenges together. We have designed a training
program that's built with local business needs in mind
and a goal to help our dealers become even more
successful in selling our products.
Pre 2010 - 20 Cities
2010 - 16 New Cities
Ahmedabad
Indore
Surat
Korba
Nasik
Mumbai
Navi Mumbai
Pune
Satara
Hyderabad
Karad
Vijaywada
Hubli
Our training provides both mandatory and
voluntary learning modules that include:
I.
II.
III.
IV.
Competence development
Market and business insight
Sales argumentation
Brand guidelines
Kolkata
Shimoga
Hosur
Bangalore
Chennai
Calicut
Eranakulam
Erode
Coimbatore
Tirpuri
These are particularly convenient and helpful for our
Goodyear Wheelcare dealers. They learn more about
new additions and updates to our product portfolio
and the latest know-how in managing their business
better.
Promotions
Attractive consumer promotion schemes
such as Tread 'n' Blend and Groom Vroom by
Goodyear India provide dealers with a range
of marketing and branding support vehicles.
Our channel partners also have access to a
wide range of marketing tools like branded
stationery, website presence, product
presentations, event stands & other cobranding opportunities.
19
ON THE ROAD TO MARS
Goodyear and NASA collaborated to create the perfect
tyre for the hot, rocky, ground of Mars and the moon.
The tyre consists of 800 load bearing springs and
metallic mesh, and won Goodyear an R&D 100 (the
“Oscars of Innovation”) award in 2010.
05
FULL CIRCLE
Employees, Partners & Society
GOODYEAR ANNUAL REPORT 2010
FULL CIRCLE
FULL CIRCLE
Employees, Partners & Society
PUTTING PEOPLE FIRST
Goodyear has always enjoyed long-term commitment
with its employees. People come to Goodyear not just
for a job, but for a career in an organisation whose
employee bonding is rooted in shared values and
mutual respect.
Goodyear India associates from various departments,
organised innovative stalls and interactive activities to
engage the crowd. The charity money was raised by
selling the games stall tickets and free will donations
in drop boxes.
Employee pride in their Company is reflected in their
loyalty (significant drop in employee turnover) as well
as in their active participation in employee programs.
In 2010, we had an average 8 base points rise in
Associate Engagement over our last survey (2008)
score while we are on average 20 base points higher
than our Global average. Moreover, the dedication
and community spirit they demonstrated, attest to
the strength of Goodyear's core values.
Spreading 'Smiles' at Goodyear
It is said if you see a friend without a smile, give him
one of yours. And that's exactly what everyone at
Goodyear India does!
The 3C team's unique 'Smiley' program encourages
the expression of joy from one to other. The
appreciation programme 'Smiley' was initiated to
help each associate reach out to and thank those who
have “made them smile” or “made a difference” in
any way.
Every month the “Milestone Meeting” serves as the
platform to publicly celebrate these smiley awards
alongside the other business and personal milestones.
Diwali Celebrations The Goodyear Way
21
In the midst of the festive season in India, Goodyear
hosted a fund raising dinner for all its associates in the
corporate office along with their families. The dinner
got all the departments together to enjoy the festival
of lights - Diwali, with loads of games and delectable
food, and simultaneously raise money for a good
cause.
The Women In Leadership (WIL) team had taken the
responsibility of identifying and associating with an
NGO, to whom the amount collected, was handed
over for charity and child development.
The celebration continued at the Goodyear India
corporate office, in New Delhi with a special lunch
being organised in the office, on the eve of Diwali.
The associates enjoyed the day with interactive
sessions and gifts were distributed to them as a thank
you gesture by the HR team.
Retaining Talent and Building
Bench Strength
One of our challenges is to attract and retain the best
talent available, provide them with Goodyear's
expertise and develop their full potential. That's why
at Goodyear, next level movements were made more
performance and capability driven. Effective
Succession Planning enables the organisation to
identify talented employees and train them for future
higher level and broader responsibilities. Succession
Planning also builds bench strength and prevents any
business loss in the event that any key employee
leaves the company or moves from one location to
another.
DARPAN: Visiting Yourself and
Looking Within for Answers
The Darpan workshop was organised to help our
associates have a better understanding of themselves,
assisting them in fully utilising their areas of strength
and actively working towards improving their
opportunity areas for organisational & individual
success. The workshop consisted of an assessment of
technical and behavioural competencies.
During the workshop, Goodyear associates were
involved in a number of activities, both as groups and
as individuals. Designed to identify strengths and
possible areas of improvement, each workshop
consisted of standardised processes that included a
variety of techniques including interviews, case
studies, presentations as well as behavioural
simulation exercises.
Encouraging Performance
Earning the commitment of team members requires
aligned and rewarding policies, notably in fastgrowing countries like ours, where employee
retention is especially important. Goodyear India
performed very well in the current financial year for
which, all the associates were recognised through
incentives and more than half of the employees were
paid 150% of their eligible bonus.
Managing Employee Relations
The company invested substantial time and resources
to maintain healthy employee relations across
board. The shop-floor associates and union
representatives were involved in various initiatives
within and out-of-factory premises to help them gain
deeper understanding of the business. Shop-floor
associates feel a stronger connect to the overall
operations of the company and understand the
impact they make.
CIS - Training
Six Sigma Training
The first Yellow Belt training for 2010 for Goodyear
India was held from 3rd February 2010 to 6th February
2010 at New Delhi. The training was specific to the
Commercial team so as to increase the CIS resource
strength in this department.
The program received an enthusiastic response with
25 class participants - the highest ever! It was quite an
interesting mix of participants from various
departments including- sales, q-tech, supply chain,
production and HR which helped in building and
sharing cross functional understanding.
22
GOODYEAR ANNUAL REPORT 2010
FULL CIRCLE
BPPM Workshop to Simplify Import Process
With the aim to simplify the Import process and to identify redundancy for subsequent elimination, the CIS and Supply Chain teams
conducted the BPPM (Brown Paper Process Map) workshop. Due to the complexity and involvement of different functions, the same
was covered in three sessions. This initiative was well supported by active participation of all relevant functions.
The first two sessions helped map the AS-IS Import Process for all categories:
Capital Goods
Raw Material
Finished Goods
The process mapping helped the team identify the bottlenecks and delays. The closing session was conducted on 29th June 2010,
wherein the action plan along with the "Ideal To Be" process was decided for each function.
CIS Workshop in Delhi
The CIS group in the corporate office and Ballabgarh facility came
together for a CIS workshop held in Delhi on 13th August, 2010 with
a two fold objective:
To re-connect as a team and share the current achievements and
future expectations
To brainstorm for additional savings prospects in each area to meet
2010 business objectives
23
The presence of the management gave the event a kick start and set
the tempo for the day. It went a long way in reposing the confidence
in the function. Meaningful discussions, functional interactions and
Q&As led to a better business understanding and focus leading to
the group coming up with more than 60 ideas of savings
opportunities.
PARTNERS
Training Program for India's
3PL Partners
As a part of our continuous initiatives to understand
and work closely with our customers, suppliers, and
service providers, CIS and Supply Chain joined hands
to impart training to our 3PL partners. A one day CIS
awareness training program on key methodologies
was organised on Saturday, 20th February, 2010. This
saw participation of 12 key 3PL members from West
that included two of the JIT (Just In Time) warehouse
managers from Maruti and Hyundai. The key account
managers had expectations of acquiring learning and
information beyond their current understanding. The
full day program covered the basic CIS overview with
lean and business processes mapping. The teams
went on to map two key processesa) Order to delivery to customer
b) Transit time from factory to C&F
An introduction to basic 5S - a lean principle of work
place organisation followed that was well received by
all.
5-S Lean Training for our 3PL
Partners
The joint initiatives of CIS and Supply Chain with
our 3PL partners continued in March 2010. On
March 2nd, a 5S Lean Training was organised for 3PL
RDC Faridabad and C&F Delhi at RDC Faridabad.
The brief introduction, objective and a peep through
the gains through 5S helped the team to understand
this methodology and post the assessment of the
current layout at RDC. The teams came back with the
recommended changes to help build a better
workplace around. This topic was later rolled out and
added in the other 3PL training programs to create
awareness and understanding.
PLANT ACTIVITIES
Shramdaan:
Improving The Working Environment &
Culture
Committed
Committed to
to Customer
Customer
Satisfaction: India Plant associates
India
Associates
visit Goodyear Dealers
visit Plant
Goodyear
Dealers
Goodyear India organises associate market visits every
month with an objective to capture-
Market Expectation
Competitor Performance
Issues/ Complaints
In this way, associates are encouraged to interact freely
with our channel partners to have first hand information
about the tough competitive market and high
expectations of the customer.
A tradition developed by CIS Ballabgarh, Shramdaan
is an event where associates from different
departments come together to help the operators
clean the machines and look for abnormalities.
Identified abnormalities get solved then and there or
else are sent to the business centre manager with an
action plan.
Shramdaan gets organised on every Saturday and
enjoys a good response from all departments. This is
an example of the strength of the plant teams at
Ballabgarh who are "working towards a common
vision to attain uncommon results"
Customer feedback goes a long way in strengthening
the commitment of our associates towards better
product quality and also motivates them in further
improving our plant's outgoing product quality.
Associates also get an opportunity to see how
competitor's products are being perceived by the
consumers & dealers.
These visits to our channel partners also help the
associates understand new product performance &
recognise any issues/complaints with our products as
well as new opportunities for improvement.
24
GOODYEAR ANNUAL REPORT 2010
FULL CIRCLE
SAFETY
Providing a safer workplace
behaviour and celebrate safety milestones like:
Safety, industrial hygiene and chemical stewardship
remain top priorities for Goodyear as we pursue our
vision of “No One Gets Hurt”. All Goodyear facilities
develop strategies based on the four cornerstones of
this vision -
Safety Week
-
Strong leadership and guidance
Well-defined processes for examining and
modifying at-risk behaviour
Deploying ergonomics to reduce illness
and injury
Strongly promoting standards for
preventive maintenance and compliance
By setting aggressive goals, establishing proactive
processes and executing systems in a timely manner,
we have achieved significant positive change in our
safety culture and continue to drive towards our goal
of reducing incidents.
The Health and Safety team worked hard in 2010 to
promote workplace safety. Our plant offices
developed awareness campaigns to encourage safe
25
Goodyear India Ballabgarh (Power House) observed
Safety Week in August 2010. During the week, group
activities and new programs like Safety Commitment
Signature, Stop and Go Card implementation, Safety
Representatives' training, new safety book, cross
functional visits, safety arm band, buddy system and
safety videos were organised to reinforce and nurture
the safety awareness among associates.
Vivek Devgun, Plant Manager, joined by the factory
operating team explained the importance of
observing safety on and off the workplace and
encouraged associates to participate in all the safety
activities planned during the week. As a show of
commitment, a Safety Pledge was made by all
associates.
The team, under the leadership of the Power House
Manager, Anil Gupta, was fully committed to take
Power House to the next level of safety.
ON THE HIGHEST VOLCANO ON EARTH
06
In 2007, two Jeep Wrangler Unlimited vehicles, fitted
with Goodyear MT/R tyres, set a new world record by
climbing 6,646 meters (21,804 feet) to the world's
highest volcano's (Ojos del Salado in Chile) rim.
WHEEL OF FORTUNES
Directors' Report
Corporate Governance
Management Discussion & Analysis
Audited Financials
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Directors' Report
Your Directors present the audited results for the year ended December 31, 2010 as under:
(Rs. in Million)
2010
2009
13,944
10,735
801
535
Net Sales & other income
13,143
10,200
Less: Total Expenditure excluding
Interest & Depreciation
11,845
8,926
1,298
1,274
36
34
153
126
1,109
1,114
Less: Provision for Taxation:
Current Tax
Deferred Tax
Fringe Benefit Tax
367
(6)
---
383
(2)
2
Profit After Tax
748
731
Total Sales & other Income
Less: Excise Duty
Profit Before Interest, Depreciation,
& Tax
Less: i) Interest Expenses
ii) Depreciation
Profit Before Tax
During the year, the net sales and other income
increased from Rs. 10,200 Million in the previous year
to Rs. 13,143 Million. The export sales stood at Rs 594
Million. Other Income rose by 250 % mainly due to
reversal of Provision of Rs. 47 Million related to 'Price
Differential pends settlement' matter and Increase in
interest Income on Deposits by Rs.37 Million.
The depreciation for the year is inclusive of the
accelerated depreciation amounting to Rs 5 Million, in
respect of a category of equipment due for
replacement.
27
DIVIDEND
Your Board recommends a dividend @ Rs 7 per equity
share for the year 2010. The recommended dividend
will absorb a sum of Rs. 161 Million and tax on
dividend will be Rs. 27 Million. Out of the surplus, an
amount of Rs 80 Million is transferred to General
Reserve and balance of Rs. 1,513 Million is carried to
the Balance Sheet.
OPERATIONS
At macroeconomic level, the Indian economy has
been experiencing strong growth, with the Central
Economic Advisory (CEA) expecting GDP up 8.5%
for 2010-2011. The strong economy, coupled with
improving consumer confidence and a good
monsoon, helped spark strong demand for tractors
and passenger vehicles, the primary focus segments
for your Company.
The tractor industry in India has witnessed an
exponential growth of 27% in 2010 (Source: Tractor
Manufacturers Association). This resulted in an
increased demand for tyres which your Company
capitalized on, with strong sales growth of tractor
tyres to OEM customers and in the replacement
market.
Similarly, new passenger vehicles sales grew an
unprecedented 29% (Source: Society of Indian
Automobile Manufacturers), translating into strong
consumer tyres demand from OEM customers. The
replacement market increased as well, following the
brief slowdown experienced late 2008 and early
2009. This fueled strong growth in your Company's
consumer tyres sales.
FINANCE AND ACCOUNTS
During the year, additions to fixed assets amounted
to Rs. 342 Million as against Rs. 180 Million in the
previous year. The Capital expenditure incurred
amounted to Rs. 573 Million. The interest cost
during the year has increased from Rs. 34 Million in
the previous year to Rs. 36 Million.
As at the end of December 2010, an amount of NIL
matured deposits remained unclaimed.
DIRECTORS' RESPONSIBILITY STATEMENT
UNDER SECTION 217(2AA) OF THE COMPANIES
ACT, 1956
Your Directors state that the annual accounts of the
Company have been prepared in conformity, in all
material respects, with the generally accepted
accounting standards in India and supported by
reasonable and prudent judgements and statements
so as to give a true and fair view of the state of affairs
of the Company and of the results of the operations
of the Company. Significant accounting policies
followed and other disclosures are appearing in
Schedule 15(a) to the Notes to the Accounts and
forming part of the annual accounts.
These financial statements of the Company have
been audited by M/s Price Waterhouse, Chartered
Accountants, Gurgaon, (Registration Number:
FRN301112E). A reference may be made to their
report dated February 21, 2011 to the members
together with Annexure thereto containing
information per requirement under the Companies
(Auditor's Report) Order, 2003, as amended by the
Companies (Auditor's Report) (Amendment), Order,
2004 attached with these annual accounts.
Proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 1956, for safeguarding the assets of the
Company and for preventing and detecting fraud
and other irregularities.
The internal control system of the Company is
monitored by an independent internal audit team,
which encompasses the examination and evaluation
of the adequacy and effectiveness of the system of
internal control. Internal Auditors, Audit Committee
Members and Statutory Auditors have full and free
access to all the information and records considered
necessary to carry out the assigned responsibilities.
The issues raised from time to time are suitably acted
upon and followed up at different levels of
Management.
The annual accounts have been prepared on a going
concern basis.
FUTURE OUTLOOK
As per the Central Economic Advisory (CEA), the
Indian economy is expected to continue to grow at a
fast pace, with GDP growth forecasted at 9% for
2011-2012. However, cost and competitive
pressures are expected to stay.
In this context, your Company will continue to focus
on the review of activities in different areas of
operations under the umbrella of the Continuous
Improvement System (CIS). The CIS is an integral part
of your Company's philosophy to maximize gains
and reduce costs in order to address the market
realities.
In the tyre industry, strong growth is expected to
continue in both the farm tyres and the consumer
tyres segments. Your Company intends to maintain
its focus on the production of farm tyres to retain its
leadership in the said segment, and to further
consolidate its strong position in the consumer tyres
segment.
UPDATE ON DELISTING OF SHARES
During the year, based on the decision taken and
communicated by its Promoter, The Goodyear Tire &
Rubber Company, for delisting of its equity shares
from the Bombay Stock Exchange Limited (“BSE”), in
accordance with the Securities and Exchange Board
of India (Delisting of Equity Shares) Regulations,
2009 ("Delisting Regulations") either directly or
through one or more of its subsidiaries. After passing
of the Resolution by Board of your Company,
shareholders of the company approved the proposal
28
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
for delisting of its equity shares on April 7, 2010 by
postal ballot and BSE granted its in principle approval
on April 27, 2010.
effective November 1, 2010, Mr Jean Philippe Lecerf
is continuing as Chief Financial Officer (CFO) of the
Company.
Pursuant to the Delisting Regulations, Goodyear
Orient Company Private Limited, a wholly owned
subsidiary of the promoter, The Goodyear Tire &
Rubber Company, invited bids by way of public
announcement dated May 13, 2010, to acquire, in
accordance with the Delisting Regulations and terms
and conditions set out in the Public Announcement,
up to 5,997,292 equity shares of the company,
representing 26% of the equity capital (the “Offer
Shares”) for which the approval was obtained from
shareholders by way of postal ballot.
The Board records its appreciation for the valuable
contribution made by Mr Hugo O Dedekind, Mr
Quek Khai Whatt and Mr Jean Philippe Lecerf as
Directors.
The number of Offer Shares tendered by the public
shareholders at or below the discovered price was
less than the minimum number of Offer Shares
required to be accepted for the delisting offer to be
successful in terms of Delisting Regulations.
Accordingly, the delisting offer is deemed to have
failed in terms of the Delisting Regulations.
The Company thus continues to remain listed on
BSE.
Mr Rajiv Lochan Jain is retiring by rotation at this
Annual General Meeting and, being eligible, offers
himself for re-appointment.
The information relating to the above appointments
is also appearing under the head 'Directors' in the
Corporate Governance Report.
AUDITORS
M/s Price Waterhouse, Chartered Accountants,
Gurgaon, (Registration Number: FRN301112E),
retires at the conclusion of this Annual General
Meeting and are eligible for reappointment.
Dr. Ashok K Agarwal, has been re-appointed as
Cost Auditor for conducting the cost audit for the
year ending December 31, 2011.
DIRECTORS
In the Board Meeting held on February 23, 2010,
resignation of Mr Hugo O Dedekind, effective the
close of business hours on March 31, 2010, was
accepted as Director & wholetime Finance Director.
In the Board Meeting held on April 27, 2010, Mr
Quek Khai Whatt was appointed as non-wholetime
Additional Director with immediate effect i.e. April
27, 2010.
In the Board Meeting held on June 8, 2010, Mr Jean
Philippe Lecerf was appointed as Additional Director
as well as wholetime Finance Director for a period of
3 years effective July 1, 2010. In the same Board
Meeting, resignation of Mr Quek Khai Whatt was
accepted as Director, effective the close of business
hours on June 30, 2010.
29
In the Board Meeting held on October 25, 2010, Mr
Yashwant Singh Yadav was appointed as Additional
Director as well as wholetime Director designated as
Director-HR & Corporate Affairs, effective November
1, 2010. In the same Board Meeting, resignation of
Mr Jean Philippe Lecerf was accepted as Director and
wholetime Finance Director, effective the close of
business hours on October 31, 2010. However,
CORPORATE GOVERNANCE
Your Company follows the corporate philosophy,
enshrined in a manual titled 'Business Conduct
Manual' for Global Operations. The core values,
inter-alia, include conducting business in accordance
with the highest applicable legal and ethical
standards, the highest standards of product quality
and services to the consumers with a view to create
value that can be sustained continuously for the
benefits of its customers, shareholders and the
associates. As per the applicable provisions of Clause
49 of the Listing Agreement with the Stock
Exchange, a Management Discussion & Analysis, a
Report on Corporate Governance together with the
Auditors' certificate on the compliance of conditions
of Corporate Governance form part of the Annual
Report.
HUMAN RESOURCE
The employer-employee relations throughout the
year remained cordial. Measures for training,
development, safety of the employees and
environmental awareness received the top priority of
the Management.
The Statement of Particulars of the employees of the
Company, pursuant to Section 217 (2A) of the
Companies Act, 1956 forming part of this report, is
also attached.
ANNEXURE
The Annexure to Director's Report under The
Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 forming part of this
report, is attached.
Central Governments etc. for their valuable
contribution and continued support. Your Directors
also wish to place on record their deep appreciation
to The Goodyear Tire & Rubber Company, Akron,
Ohio, USA for their continued support and
contribution in all the spheres of operations.
On behalf of the Board of Directors
Aurangabad
February 21, 2011
Pierre Eric Cohade
Chairman
ACKNOWLEDGEMENT
Your Directors place on record their sincere thanks to
the Company's esteemed Shareholders, Customers,
Suppliers, Associates, Bankers and the State and
Annexure to Directors' Report
The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A.
CONSERVATION OF ENERGY
a)
Energy conservation measures taken:
1)
2)
3)
Reduction in plant dead load by 8%.
Pet coke boiler efficiency improved by 2%.
Installed Rotary UPS and restrict in house
power generation.
Installation of energy efficient pumps at
STP and ETP.
Installed HT capacitor to improve power
factor.
Installed energy efficient lighting feeder.
Installed solar street lights.
Introduced energy efficient float type
steam traps to improve condensate recovery
by 2%.
Installed energy efficient blowers for
Banbury rack cooling.
Installed energy efficient fans on 10 X 10
extruder.
Installed energy efficient Dome deflation
diaphragm valves.
4)
5)
6)
7)
8)
9)
10)
11)
b)
Additional investments and proposals, if
any, being implemented for reduction of
consumption of energy:
1)
2)
3)
4)
5)
c)
Installation of energy efficient screw
compressor.
Installation of energy efficient hydraulic
pump on H, I line.
Installation of power less eco ventilators in
place of conventional motorized exhaust
fans.
Installation of energy efficient lightings.
Installation of energy efficient Package air
conditioning system.
Impact of the measures at (a) & (b) above
for reduction of energy consumption &
consequent impact on the cost of
production of goods:
The above measures helped towards
reduction in energy consumption, quality
improvement, reduction in utility cost &
partially offset high inflation in energy cost.
d)
Total energy consumption and energy
consumption per unit of production as
per Form A of the Annexure in respect of
industries specified in the Schedule
thereto:
30
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Year 2010
Year 2009
23,682
115,875
10,885
47,956
4.89
4.41
Units (000)
Unit /Ltr of Fuel
15,499
3.94
24,894
3.53
COST/UNIT (Rs.)
7.69
6.78
Quantity (K.Ltrs)
Total Amount (Rs. '000)
0
0
12
355
Average Rate (Rs./K.Ltr)
0
30,725
131
3,695
538
12,407
28,141
23,048
8,170
7,007
66,650
43,017
8,158
6,139
1,756
13,253
1,772
10,760
7.55
6.07
764
769
0.1910
0.1951
26.00
25.50
A. Power and Fuel consumption
1. ELECTRICITY (KWH)
a) PURCHASED
UNITS (000)
TOTAL AMOUNT (RS. '000)
Rate/Unit (Rs.)
b) OWN GENERATION
Through Generator
2. STEAM
a) HSD/LDO
b) Residual Furnace Oil / Furnace Oil
Quantity (Tonnes)
Total cost (Rs.'000)
Average Rate (Rs./Tonnes)
c) Petcoke (For Process Steam)
Quantity (Tonnes)
Total cost (Rs. '000)
Average Rate (Rs./Tonnes)
3. NITROGEN
Quantity (cubic meters-000)
Total Cost (Rs. '000)
Average Rate (Rs./Cubic Meter)
B. Consumption per tonne of production
31
Electricity (KWH)
FUEL (K.LTRS.-EXCL.NITROGEN GAS) FOR STEAM
Nitrogen (m3)
B. TECHNOLOGY ABSORPTION
3. Future Plan of Action
e) Efforts made in technology absorption as per
Form B of the Annexure
Introduction and promotion of New Quality Products
to existing range of front and rear farm tyres in order
to meet market requirements and exceed customer
needs. New sizes in farm tyres are going to be
introduced.
Research & Development (R&D)
1. Specific areas in which R&D activities carried
out by the Company:
4. Expenditure on R&D
The Company, in close co-ordination with its Parent
Company, The Goodyear Tire & Rubber Company,
Akron, Ohio, USA and its Parent Company's
technical centers based in Luxembourg, Akron &
Japan, carried out R&D activities in specific areas.
a) Capital
b) Recurring
c) Total
d) Total R & D Expenditure
(as a percentage of total turnover)
R&D focused on the Development of the new
Product for both Export and Local Markets.
Technology absorption, adaptation &
innovation
The project to facilitate the quicker release of new
tyres for Farm Category was conceived and Farm
Tyre Testing was made functional at Ballabgarh.
Farm tyres with Radial Technology were developed
for Indian market. New Vajra Range for farm tyres
released for hard soil market to attain leadership.
1. Efforts in brief made towards technology
absorption, adaptation & innovation:
Major emphasis was on improving the quality
standards and enhanced customer satisfaction. This
was primarily achieved through process
improvements, control on systems, and reduction in
waste, energy conservation. Use of tools such as Six
Sigma and small group activities with the
technological support resulted in controlling the
variations in processes, maximizing the productivity
and minimizing the cost of production.
Efforts continued in the direction of fine-tuning of
the construction and the changes in compound
formulations. These resulted in improvements in the
product performance and reduced usage of high
cost raw materials.
2. Benefits derived as a result of above R&D
The R&D activities helped the company to add new
quality products to its range and achieve greater
customer acceptance in the market. These activities
also enabled the company to reduce process waste,
lower the energy consumption, increase productivity
& release new products in the Market to achieve
higher “Customer Satisfaction”.
(Rs. in Million)
NIL
2.97
2.97
0.02%
a) New Product Introduction
R&D activities helped the company in the
introduction of products designs, Farm tyres with
superior compounds to increase market acceptance.
New sizes developed for Africa and Asia exports.
b) Process Improvement
Continued efforts made in the areas of Quality
Improvement, waste reduction, process capability in
major equipments and cost optimization to specially
improve the market acceptance of company's
products.
c) System Improvement
Continual efforts made to implement and sustain
Quality Management System and Environment
Management System in the Plant to meet and
enhance Customer's present and emerging needs.
2. Benefits derived as a result of above efforts:
The technical innovations & adaptation made at
Goodyear Technical Centres in USA & Europe along
with company's inputs helped the company to
introduce new products & improve the market
32
WHEEL OF FORTUNES
GOODYEAR ANNUAL REPORT 2010
acceptance of Goodyear Products. New Design Vajra
Super launched in Rear Farm Tyres & in Front Farm
tyres especially for Hard soil market.
3. Imported Technology:
a) Technology Imported
)
b) Year of Import
)
c) Has technology been fully absorbed? ) Not
d) If not full absorbed, areas where this ) Applicable
has not taken place, reasons there for )
& future plans of action
)
C. FOREIGN EXCHANGE EARNINGS
AND OUTGO
f) Activities relating to exports; initiatives taken to
increase exports; development of new export
markets for products and services; and export plans:
During the year 2010, Goodyear products were
exported to Australia, Bangladesh, Germany,
Guatemala, Kenya, Morocco, New Zealand,
Pakistan, Saudi Arabia, Sri Lanka, United Arab
Emirates etc.
g)
Foreign Exchange (Rs. in 'Million')
Total foreign exchange used and earned : (Rs. in 'Million')
Year
Earned
Export
(FOB)
2010
33
594.02
Used
Others
Capital Goods
25.01
100.58
Import (CIF)
Stores & Spares
5.12
Raw Materials
889.18
Others
885.59
Annexure To The Directors' Report
Information as required under section 217 (2A) of the Companies Act ,1956 read with Companies (Particulars of Employees)
Rules, 1975 and forming part of the Directors' Report for the year ended December 31, 2010.
Name of the employee : Age : Designation/Nature of duties : Remuneration received (Rs.) : Qualification :
Experience (Years) : Date of Joining : Last Employment held : Last Designation
EMPLOYED THROUGHOUT THE YEAR :: Anand Rajeev : 50 : Vice Chairman & Managing Director : 17893290 : Diploma
Mech. Engg. : 29 : 01.01.1982 :: Arora Sanjeev : 34 : Head – Financial Planning & Analysis : 3990603 : CA : 11 : 21.11.2008 : Nokia
India Pvt. Ltd. : Business Controller - Care :: Bedi Gurkirpal Singh : 45 : Head – OTR Business : 2514814 : BSc, PGDBA : 22 :
29.12.1998 : Indag Rubber Ltd : Asstt. Divisional Manager :: Chutani Ramesh Chand : 53 : Country Purchase Head : 3213470 : BSc.
: 32 : 01.10.1980 : Bharat Carbon & Rubber Mfg. Co. : Trainee Supervisor :: Devgun Vivek : 42 : Manufacturing Director^ :
3430554 : Diploma (Mechanical) : 21 : 27.05.1989 :: Gandhi Vikas : 31 : Head - Retail : 2748930 : MBA : 10 : 24.11.2009 : ICI India
Limited : Business Manager - Modern Retail :: Gupta Rajiv : 38 : Head-Customer Services : 2477596 : MBA : 15 : 01.11.2006 :
Samsung India Electronics Ltd : Sr. Manager Customer Satisfaction :: Gujral Jatinder S. : 48 : VP - Farm, Commercial : 7889335 :
B.Tech : 26 : 11.07.2007 : Tata Motors India : Global Head - CV Parts & Aggregates :: Jaidka Harinder Singh : 46 : Regional Sales
Manager - West : 2626026 : MBA : 23 : 01.06.1993 : Bombay Tyres : Territory Manager :: Kaul Neena : 41 : MBB - Asia Pacific & CIS
Head - India : 2864016 : B.Com, Diploma : 22 : 25.04.1995 : DCM Transworld Pvt Ltd : Secretary :: Kumar Aneel : 45 : Head - IT :
2453745 : Chartered Accountancy : 23 : 16.04.2008 : Reliance Retail Ltd. : Asstt. General Manager - Finance :: Laha Soumava : 43 :
Director - Supply Chain ^ : 3835593 : BE (Mechanical),Post Graduate Diploma in Financial Management : 20 : 10.10.2007 :
Valvoline Cummins Ltd. : Asstt. General Manager-Sourcing and Plant Operations. :: Lall Tarun Kumar : 49 : Head - Pricing :
4112302 : B.Com., CA : 23 : 01.05.1987 :: Mehra Deepak : 50 : Business Manager - North : 2587217 : MBA : 23 : 07.08.2008 :
Reliance Retail Limited : General Manager - Store Operations :: Mitra Samit : 40 : National Sales Manager-Re : 2935883 : MBA : 16
: 15.09.2003 : Raymonds : Regional Manager :: Pillai K C S : 54 : GM - Tech. & Business Dev. Commercial : 4270133 : BE : 30 :
15.05.1984 : Premier Tyres Ltd. : Technical Service Engg :: Singh Dipinder : 52 : VP - Consumer Business : 8897766 : MBA,Phd : 26 :
01.02.2009 : Goodyear Tire Management Company (Shanghai) Ltd. : Marketing Director - Consumer PBU :: Singh Harbhajan : 31 :
Manager Distribution & Supply Planning : 2496309 : BE,PGDIE : 7 : 07.08.2008 : Castrol India Ltd. : Supply Chain Manager :: Singh
Randeep : 36 : National Sales Manager-Replacement sales : 4019847 : BTech, PGDM : 13 : 11.12.2008 : Subhiksha Trading
Services Ltd. : National Business Manager - Small Appliances :: Singh Vinod Kumar : 38 : Plant Head - HR : 2894922 : PGDBM : 15 :
30.09.2008 : Dabur Pharma Ltd : Asstt. General Manager-HR :: Soni Prince : 37 : Head - Treasury : 2714626 : B.Com.(H),
Chartered Accountant, Diploma in RDBMS : 12 : 29.10.2009 : Thomas Cook India Ltd : General Manager - Business Strategy ::
Yadav Yashwant Singh : 52 : Director - Human Resources & Corporate Affairs* : 8157429 : LLB, MBA : 29 : 12.11.2009 : General
Motors India Pvt Ltd : Vice President - Human Resource
EMPLOYED FOR PART OF THE YEAR :: Babu Ram : 58 : Area Manager : 448300 : Intermediate : 39 : 23.11.1971 :: Bassi Vinay
Kumar : 43 : Human Resources Director^ : 946691 : MBA : 23 : 12.10.2007 : Pepsico India Holdings Pvt. Ltd. : VP - HR :: Bhor
Pranab Kumar : 58 : Manager-Export/Import Doc : 1354059 : BSc (H) : 37 : 29.04.1993 : Samtel India Ltd : Assistant Manager Import :: Chander Suresh : 52 : Assistant Manager - Mech. Maintenance : 684952 : ITI (FITTER) : 31 : 27.07.1979 :: Dedekind Hugo
O. : 60 : Finance Director** : 2080568 : Studied at Institute of Administration and Commerce in University of Natal : 35 :
01.11.2005 : South Pacific Tyres, Australia : Head of Finance & IT :: Giridharan R : 40 : Manager - Sales Training & Operations :
964344 : B.Com, Diploma : 20 : 01.03.1995 : Hindustan Lever Ltd : Secretary :: Gupta Pankaj : 38 : Head - Legal & Company
Secretary : 2008745 : LL.B / FCS / B.Com(H) : 13 : 21.04.2010 : ARICENT Technologies (Holdings) Ltd. : Sr. Mgr-Legal & Company
Secretary :: Gupta Ravindra Kumar : 55 : Controller : 221247 : ICWAI : 33 : 01.10.2010 : Goodyear South Asia Tyres Pvt Ltd : Plant
Head - Finance :: Jain Shant Kumar : 59 : Head - Legal & Company Secretary : 2193248 : B.Com., LLB, FCS : 42 : 16.10.2009 :
Goodyear South Asia Tyres Pvt Ltd : Head - Legal & Company Secretary :: Lecerf Jean Philippe : 44 : Chief Financial Officer** ^~ :
4601587 : Business Degree (Institut Commercial Supérieur) / Diplôme d’Expertise-Comptable (CPA) : 22 : 01.07.2010 : Planet of
Hospitality : Group Chief Financial Officer :: Raghava Ranjeet Singh : 38 : Manager - ER : 219927 : MBA, LLB : 15 : 26.02.2007 :
Honda Seil Car India Ltd. : Asstt Manager - ER & IR :: Singh Hundal Sarabjit : 50 : Manufacturing Director - ASEAN ^ : 2058190 :
M.Sc., Advanced Course in Mgmt : 25 :15.11.2010 : CEAT Ltd : VP-Mfg :: Vinodan Vellat : 58 : Sr. Accounts Officer : 893462 : BSc.
: 36 : 12.08.1974
Notes:
1. Remuneration as shown above includes Salaries, Bonus, Company's contribution to Provident Fund, Leave Travel, House Rent Allowance, Expenditure incurred on providing Housing, Medical and other
facilities.
2. Employees named above are/were whole time employees of the Company.
3. Conditions of employment provide for termination of services by either party upon giving three month's notice and in the case of employees marked** upon giving one month's notice.
4. None of the employees named above is a relative of any director.
5. Designation of the employees indicates the nature of duties.
^ Non- Board Member as on December 31, 2010.
~ Jean Philippe Lecerf has been appointed as wholetime Finance Director effective July 1, 2010 and ceased effective the close of Business hours on October 31, 2010, however, w.e.f November 1, 2010, Mr
Lecerf is continuing as Chief Financial Officer (CFO) of the Company.
* Yashwant Singh Yadav was Vice President - Human Resources & Corporate Affairs during the year and effective November 1, 2010 was appointed as wholetime Director designated as Director - HR &
Corporate Affairs.
34
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Corporate Governance
Goodyear India Limited is a subsidiary Company of The Goodyear Tire & Rubber Company, Akron, Ohio, USA.
The Company's corporate philosophy is enshrined in a manual titled 'Business Conduct Manual' for Global
Operations. The core values, inter-alia, include conducting business in accordance with the highest applicable
legal and ethical standards, ensuring the highest standards of product quality and services to the consumers with
a view to create value that can be sustained continuously for the benefits of its customers, shareholders and the
associates. The Company has implemented the requirements placed under Clause 49 of the Listing Agreement
with the stock exchanges (hereinafter referred to as 'Clause 49'). The Report of the Company on Corporate
Governance is as under:
1. Code of Conduct
In terms of the requirement of clause 49, the Board of Directors of the Company, in line with the corporate
philosophy laid down a Code of Conduct for all Board Members and Senior Management of the Company. The
Code of Conduct is displayed at website www.goodyear.co.in. As required, a declaration duly signed by the
Managing Director regarding compliance with the above code is attached as Annexure-A.
2. Board of Directors
The composition of the Board of Directors of the Company, in compliance with Clause 49 of the Listing
Agreement, as on December 31, 2010 is given below:
Name
No. of Board
Meetings of
the Company
Held during
the year
Number of Membership
in other Boards or
other Committees
as a member
or chairperson
Whether
attended
the last AGM
Attended during
the year
Board*
Committee**
Mr Rajeev Anand
Executive
6
6
None
None
Yes
Mr Yashwant Singh
Yadav
Executive
6
(None during
his tenure)
None
None
None
NA
Mr R V Gupta
Independent
Non-Executive
6
6
6
5 (including
1as Chairman)
Yes
Mr C Dasgupta
Independent
Non-Executive
6
6
None
None
Yes
Mr Rajiv Lochan Jain
Independent
Non-Executive
6
6
1
1
Yes
Mr Pierre E Cohade
Non-Independent
Non-Executive
Non-Independent
Non-Executive
6
4
None
None in
India
None in
India
No
6
None in
India
None in
India
Non-Independent
Non-Executive
6
1
None in
India
None in
India
No
Non-Independent
Non-Executive
6
(2 during
his tenure)
6
(2 during
his tenure)
6
(2 during
his tenure)
1
None in
India
None in
India
No
2
None in
India
None in
India
No
2
None in
India
None in
India
No
Mr Brad Lakhia (i)
(Alternate Director to
Mr Pierre E Cohade)
Mr Daniel Ackerman (ii)
(Alternate Director to
Mr Pierre E Cohade)
35
Status i.e.
Promoters,
Executive,
Non-executive,
Independent
non-executive,
nominee of
Financial
Institution
Mr Quek Khai Whatt (iii)
Mr Jean Philippe Lecerf (iv) Executive
Mr Hugo O Dedekind (v)
Executive
No
*
**
(i)
(ii)
(iii)
(iv)
(v)
Excluding interest in Societies/Trust/Private Companies/ Limited Liability Partnerships.
Includes Audit Committee and Shareholders'/Investors' Grievance Committee of Public Limited Companies only.
Mr Brad Lakhia was alternate Director to Mr Pierre E Cohade for the period August 11, 2010 - October 24, 2010 and appointed again from October 26, 2010.
Mr Daniel Ackerman was alternate Director to Mr Pierre E Cohade for the period January1, 2010 - February 9, 2010, February 10, 2010 - February 22, 2010 & February
24, 2010 - August 8, 2010.
Mr Quek Khai Whatt, Director appointed, effective April 27, 2010 and ceased effective the close of business hours on June 30, 2010
Mr Jean Philippe Lecerf was appointed as wholetime Finance Director w.e.f July 1, 2010 and ceased from directorship effective the close of business hours on October 31,
2010. However Mr Lecerf is continuing to be the Chief Financial Officer (CFO) of the Company.
Mr Hugo O Dedekind, wholetime Finance Director ceased effective the close of business hours on March 31, 2010.
During the year, there was no pecuniary relationship or business transaction by the Company with any nonexecutive Director, other than the sitting fee for attending the Board/ Committee meetings as well as the
travelling/conveyance expenses incurred for attending Company's business/meetings.
During the year 2010, six Board Meetings were held on February 9, 2010, February 23, 2010, April 27, 2010, June
8, 2010, August 9, 2010 & October 25, 2010.
3. Audit Committee
The constituted Audit Committee has the terms and roles as specified in Clause 49 of the Listing Agreement,
Section 292 A of the Companies Act, 1956. As per Listing Agreement at least two-thirds of the members of
Audit Committee should be Independent Directors. The current Audit Committee of your Company consists of
4 Directors namely Messrs R V Gupta, C Dasgupta, Rajiv Lochan Jain, Independent Directors and Mr Rajeev
Anand, Managing Director. Mr R V Gupta, an Independent Non-Executive Director who possesses accounting
and financial related management expertise, is the Chairman of the Committee.
The Company Secretary acts as the Secretary of the Committee.
During the year 2010, five Audit Committee meetings were held on February 23, 2010, April 27, 2010, June 8,
2010, August 9, 2010 & October 25, 2010.
Attendance at Audit Committee Meetings
Name of the Member
Number of meetings attended
Mr R V Gupta
Mr C Dasgupta
Mr Rajiv Lochan Jain
Mr Rajeev Anand
5
5
5
5
4. Remuneration of Directors
The remuneration policy for the wholetime Director/Managing Director of the Company is based on the broad
principles of payment of remuneration by the parent company to its executives, i.e. a portion of remuneration is
paid on fixed basis and the remaining portion of the remuneration is based on the results. The remuneration
payable to the wholetime Directors for the year under review was approved by the Board of Directors. The
Shareholders' approval would be sought in the ensuing general meeting. Since Mr Jean Philippe Lecerf, prior to
his appointment as wholetime Director in the Company, was not resident in India for a period of 12 months, an
application dated September 3, 2010 had been filed with the Central Government for Mr Jean Philippe Lecerf's
appointment and payment of remuneration. The remuneration of Mr Jean Philippe Lecerf as approved by the
Board of Directors of the Company is within the limit prescribed under Schedule XIII to the Companies Act, 1956.
The brief information is as under:
36
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Names of the wholetime Directors
Details
Rajeev Anand
Managing Director
Yashwant Singh Yadav,
Wholetime Director
(Appointed effective
November 1, 2010)
Jean Philippe Lecerf,
Finance Director
(Appointed effective
July 1, 2010 & ceased
effective the close of
business hours on
October 31, 2010)*
Mr Hugo O
Dedekind,
Finance Director
(Resigned effective
the close of business
hours March 31,
2010)
i) Service Contract
Valid upto
February 19, 2014**
October 31,2015**
October 31, 2010
March 31, 2010
ii) Monthly Salary
Rs. 2,91,944/-
Rs. 2,50,000/-
Rs. 1,00,000/-
Rs. 82,500/-
iii) Monthly Special
Allowance
Rs. 3,42,158/-
Rs. 2,70,000/-
Not Applicable
Not Applicable
iv) Commission
Not Applicable
Not Applicable
Based on Net profits
restricted to 100% of
annual salary. Actual
paid - Rs 4,00,000/-.
Not Applicable
v) Performance
Bonus
As determined by the
Board based on the net
profit restricted to Rs.
56,06,911/- in a year
As determined by the
Board based on the net
profit restricted to
Rs. 26,96,994/- in a year
Not Applicable
Not Applicable
Company's
Accommodation or House
Rent Allowance restricted
to 60% of the salary.
Company's
Accommodation.
Actual paid Rs 5,25,000/per month.
Company's
Accommodation.
Actual paid Rs
2,41,875/- per
month.
Company's
vi) House Rent
Allowance/Leased Accommodation or
House Rent Allowance
Accommodation
restricted to Rs.
2,32,385/- per month.
*
Mr. Jean Philippe Lecerf is continuing as Chief Financial Officer of the Company.
** Terminable by giving 90 days notice from either side expiring at the end of calendar month.
Note: 1. No severance fee is payable to any Director.
2. Sitting fee was paid only to non-executive independent Directors.
Benefits: The entitlement to the wholetime
Directors, inter-alia, include personal accident
insurance, fees of clubs, medical expenses
reimbursement subject to a ceiling of four months'
salary for each completed year of service or twelve
months' salary over a period of three completed
years of service, expenditure on gas, electricity, water
and furnishings, the Company's car and telephone at
residence etc.
37
Personal long distance calls on telephone and use of
car for private purpose shall be billed by the
company.
Messrs Jean Philippe Lecerf and Hugo O Dedekind.
Messrs Lecerf and Dedekind are also entitled for
actual expenses incurred, if any, on travel and on
packing, forwarding, loading or unloading as well as
freight, insurance, customs duty, clearing expenses,
local transportation and installation expenses in
connection with the moving of personal effects for
self and family for joining duty in India in case these
have not been claimed from previous employer. Such
expenses would also be allowed on finally leaving the
employment of the Company, if Messrs Lecerf and
Dedekind are not joining any other branch of the
Company or related Company.
Company's Contribution to Provident Fund as per
the applicable laws as well as employee's share of
contribution and Return Passage for home country
for self and family incurred in accordance with the
rules of the Company are also the entitlements of
In addition to the above, Mr Jean Philippe Lecerf was
also entitled for recreation/ holiday trip once in a year
for self and family in accordance with the rule of the
Company, Children Education Allowance, in case of
children studying in or outside India, an actual
expense limited to Rs. 6,00,000/- per annum per
child, return holiday passage once in a year by
economy class to children from their place for study
abroad to India and to the members of the family
from the place of their stay abroad in India, if they are
not residing in India with Mr. Lecerf and Mr. Lecerf
was also entitled for personal driver salary
reimbursement not exceeding Rs. 2,50,000/- in a
year.
The other entitlements of Mr Rajeev Anand and Mr
Yashwant Singh Yadav, inter-alia, include
contribution gratuity at the rate of one half month's
salary for each completed year of service in the
Company, as per the rules of the Company,
encashment of leave at the end of the tenure, as per
the rules of the Company and recreation/holiday trip
once in a year for self and family in accordance with
the rules of the Company, subject to a ceiling of Rs
90,000/- in a year, personal driver salary
reimbursement not exceeding Rs. 2,50,000/- in a
year, contribution to Provident Fund to the extent
these either singly or put together are not taxable
under the Income Tax Act. In addition to this, Mr
Rajeev Anand is also entitled for Superannuation
Fund. Provided that any contribution made as per
the company's rules applicable for other Senior
Management Staff of the Company, which is in
excess of the exemption limit prescribe under the
Income Tax Act would be included for computation
of tax.
The remuneration paid is within the limits specified
in Schedule-XIII of the Companies Act, 1956 and has
due approval from the Board of Directors and
requires approval of Shareholders of the Company
for certain revision in the remuneration of Mr Rajeev
Anand made effective May 1, 2010 and
remuneration of Mr Jean Philippe Lecerf for the
period July 1, 2010 to October 31, 2010, the details
whereof were circulated by the Company to the
Shareholders vide abstract under section 302 of the
Companies Act, 1956 dated June 8, 2010 and
remuneration of Mr Yashwant Singh Yadav made
effective November 1, 2010. Further the details
whereof were circulated by the Company to the
Shareholders vide abstract dated November 1, 2010.
The details thereof would also be appearing in the
notice of the ensuing Annual General Meeting for
obtaining Shareholders' approval.
The Company has not formed any Remuneration
Committee pursuant to Clause 49 of the Listing
Agreement as the formation of the same was not
mandatory.
There is no Stock Option Scheme of the Company for
any Director (Executive / Non- Executive)
A reference to Note No. (h) of schedule 15 of the
annual accounts of the Company for the year ended
December 31, 2010 can also be made for Directorship
remuneration details.
5. Shareholders' /Investors' Grievance
Committee
The Shareholders'/Investors' Grievance Committee
consists of Mr C Dasgupta, a non-executive Director
as Chairman and Mr R V Gupta, Mr Rajiv Lochan Jain,
Mr Jean Philippe Lecerf (July 1, 2010 to October 31,
2010) & Mr Yashwant Singh Yadav
(effective November 1, 2010) as Members to look into
the matters concerning redressal of
Shareholders'/Investors' complaints like transfer of
shares, non-receipt of balance sheet / declared
dividend etc.
During the year 2010, two Shareholders' /Investors'
Grievance Committee meetings were held on June 4,
2010 & October 25, 2010.
Attendance at Shareholders'/Investors'
Grievance Committee Meetings:
Name of the Member
No. of Meetings
attended
Mr R V Gupta
2
Mr C Dasgupta
2
Mr Rajiv Lochan Jain
2
Mr Yashwant Singh Yadav*
None
Mr Jean Philippe Lecerf**
1
* Appointed effective November 1, 2010.
** Ceased effective the close of business hours on October 31, 2010.
Skyline Financial Services Pvt. Ltd., New Delhi, is the
Share Transfer Agent of the Company. The Company
has delegated the authority for share transfers to the
employees of the Company to ensure that the share
transfer formalities are attended regularly once in a
fortnight and also to oversee the share transfer area of
the Company. Mr Shant Kumar Jain for the period
January 1, 2010 to October 31, 2010 and Mr Pankaj
38
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Gupta effective November 1, 2010, Company
Secretary are the Compliance Officer's of the
Company respectively.
11 reminders/complaints received during the year
2010 have duly been replied.
6. Directors
In the Board Meeting held on June 8, 2010, Mr Jean
Philippe Lecerf was appointed as Additional Director
as well as wholetime Finance Director for a period of
3 years effective July 1, 2010, while he ceased as
Director and wholetime Finance Director, effective
the close of business hours on October 31, 2010.
However, effective November 1, 2010, Mr Jean
Philippe Lecerf is continuing as Chief Financial Officer
(CFO) of the Company.
Mr. Lecerf is a Finance Executive with over 23 years of
experience in 7 countries. He is Certified Public
Accountant with broad international background;
Mr. Lecerf has combination of strong accounting and
finance expertise with in depth knowledge of
business dynamics. He has balance exposure to both
start up businesses & large established operations
and excellent ability to adapt to complex, demanding
& volatile environments.
During his tenure as Director, he was the member of
Shareholders' / Investors' Grievance Committee of
the Company. He is also the Director on the Board of
Goodyear South Asia Tyres Private Limited. An item
for approval of Mr Lecerf's appointment and
remuneration paid has been included in the notice
for the ensuing Annual General Meeting.
In the Board Meeting held on October 25, 2010, Mr
Yashwant Singh Yadav was appointed as Additional
Director as well as wholetime Director designated as
Director- HR & Corporate Affairs, effective November
1, 2010.
39
Mr. Yadav is a Bachelor in Law and an MBA with
specialization in Human Resources. He has more than
28 years of professional and diverse experience in the
entire gamut of Human Resources Management
with large multi-national and Indian organizations
including Ballarpur Industries, Goodyear India,
Escorts Ltd. and General Motors India at leadership
levels. He was the Vice President-Human Resources &
Corporate Affairs of Goodyear India Limited before
the appointment as Director-HR & Corporate Affairs.
He is also the member of Shareholders' / Investors'
Grievance Committee of the Company.
In the Board Meeting held on April 27, 2010, Mr
Quek Khai Whatt was appointed as Additional
Director, effective April 27, 2010 and ceased
effective the close of business hours on June 30,
2010.
Mr Quek, aged 43 years, is Finance Director &
Treasurer of Goodyear Orient Company Private
Limited (GOCPL), a wholly owned subsidiary of The
Goodyear Tire & Rubber Company. He also oversees
treasury functions of Goodyear Asia Pacific. He has
more than 16 years of experience in the fields of
banking, finance and corporate treasury with
various global multinational corporations including
General Electric Infrastructure Group as Treasurer,
Asia. He was also the Director on the Board of
Goodyear South Asia Tyres Private Limited.
Mr Rajiv Lochan Jain is retiring by rotation in the
ensuing Annual General Meeting of the Company
and being eligible, offers himself for reappointment.
His brief resume is given below:
Mr Rajiv Lochan Jain is a Chemical Engineer from IIT
Kharagpur and an MBA from the Whittemore
School of Business and Economics, UNH (USA). He
was born on January 1, 1951 and did his schooling
from St Xavier's Collegiate School, Kolkata.
Mr Jain was a member of the Board of ICI India
Limited, a publicly traded company, for over 12
years. He was the Managing Director from April
2003 to May 2009 and prior to this role he was the
Chief Operating Officer and Finance Director.
Mr Jain was also the Chairman of both ICI's Research
Company in India and the joint-venture company of
ICI and Orica, Australia. He is an Independent
Director on the Board of Tara Jewels Limited and
Chairman of Performance Capital Partners.
He is also a member of the Shareholders'/Investors'
Grievance Committee and the Audit Committee of
the Company.
7. General Body Meetings
Location and time where the last three Annual
General Meetings were held are as under:Meeting Venue
49th AGM Magpie Tourism
Complex
Sector-16A,
Faridabad,
Haryana
Date
Time
June 4, 2010 3.30 P.M.
48th AGM -do-
June 19, 2009 3.30 P.M.
47th AGM -do-
May 16, 2008 3.30 P.M.
Special Resolution passed at the last three Annual
General Meetings.
Date of AGM
Description of Special Resolution
June 4, 2010
Revision in remuneration of Mr Rajeev
Anand, Managing Director
June 19, 2009
May 16, 2008
Increase in sitting fees payable to
Directors who are neither in
wholetime employment of the
Company nor a Managing
Director ;
ii) Appointment and payment of
remuneration to Mr Rajeev Anand
as wholetime Managing Director
of the Company ;
iii) Revision in remuneration payable
to Mr Hugo Dedekind as
wholetime Finance Director of the
Company ;
iv) Re-appointment of Mr Hugo
Dedekind as wholetime Finance
Director of the Company.
in terms of the Delisting Regulations and other
applicable provisions of law.
In order to conduct and supervise the process, the
Board authorized Mr Rajeev Anand, Managing
Director, Mr Shant Kumar Jain, Company Secretary
and Mr B K Sethi as scrutinizer for conducting the
postal ballot process.
The Result of the postal ballot was announced by the
scrutinizer Mr B K Sethi on April 7, 2010 at 11:30
A.M. at the Registered Office of the Company after
due scrutiny of all the Forms received up to the close
of working hours of April 3, 2010 (being the last date
fixed for return of Forms duly filled in by the
Members). The resolution was passed with requisite
majority and votes cast by public shareholders in
favor of the resolution was approximately 4.84 times
the votes cast by public shareholders against it .
The Shareholders passed all the resolutions including
the special resolutions set out in the respective
Notices.
i)
Appointment and payment of
remuneration to Mr Prabhakar Jain as
wholetime Managing Director.
Special Resolution passed through Postal
Ballot
The Company, pursuant to Section 192A (2) of the
Companies Act, 1956 vide its Postal Ballot Notice
dated March 4, 2010 passed the special resolution in
respect of voluntary delisting of equity shares of the
Company from the Bombay Stock Exchange Limited
None of the resolutions is proposed to be conducted
through postal ballot.
8. Disclosures
Disclosures on materially significant related
party transactions i.e. transactions of the
Company of material nature, with its
promoters, the Directors or the management,
their subsidiaries or relatives etc. that may have
potential conflict with the interests of the
Company at large:
The Company in its normal course of business, has
had sale/purchase transactions with the parent
Company, The Goodyear Tire & Rubber Company,
Akron, Ohio, USA and/or its subsidiaries etc. abroad
as well as with Goodyear South Asia Tyres Private
Limited (GSATPL), Aurangabad, Maharashtra (India)
on arms' length basis and the same were not
considered to be in conflict with the interest of the
Company. In addition to the aforesaid transactions,
your Company has entered into a service agreement
to avail the support from The Goodyear Tire &
Rubber Company, Parent Company in all the areas of
its operations, to receive services of Information
40
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Technology, Procurement, Production, Supply
Chain, Sales & Marketing, Finance and General &
Administration effective January 1, 2011 in
supersession of the Service Agreement dated January
01, 2010.
In the year 2010, Messrs Rajeev Anand, Jean Philippe
Lecerf, Quek Khai Whatt, and Hugo O Dedekind, the
Directors of your Company were also on the Board of
GSATPL during their respective tenures.
Normal payment of sitting fees for attending the
Board Meetings and Committee Meetings as well as
the travelling / conveyance expenses etc. incurred for
attending the Company's business / meetings by the
Directors (wholetime and non-wholetime) are also
not considered to be of any significant nature. The
remuneration details are in clause 4 above.
The Company has not had any transaction of
material nature with the Directors and / or their
relatives during the year under review that would
have conflict with the interest of the Company at
large. The disclosure of transactions with the related
parties per Accounting Standard 18 is appearing in
Note (M) of schedule 15 of the annual accounts with
the Company for the year ended December 31,
2010.
The Business Conduct Manual of the Parent
Company applicable for Global Operations including
your Company, a copy of which is circulated to
associates of the Company, inter alia, provides that
associates could anonymously report violations by
calling on the toll free number mentioned therein.
This is affirmed that no personnel have been denied
access to the Audit Committee.
Details of non-compliance, penalties, strictures
by Stock Exchanges or SEBI or any statutory
authority, on any matter related to the capital
markets during last three years:None
41
9. Means of Communication
The quarterly/annual results of the Company are
normally published in the Statesman in English and
Veer Arjun in Hindi.
Half yearly reports were not sent to the shareholders.
The quarterly results & shareholding pattern are
being displayed at website www.goodyear.co.in
under the head 'Investor Relation/Media Center'. In
terms of Clause 52 of the Listing Agreement with the
Stock Exchanges, certain documents/information
relating to the Company are also accessible on the
website www.corpfiling.co.in.
No presentations were made by the Company to the
Analysts. A Management Discussion and Analysis
Report which forms part of the Annual report is given
by means of a separate annexure and is attached to
the Directors' Report.
10. General Shareholders Information
Date, Time and Venue of
the Annual General
meeting
- Tuesday, June 21, 2011 at
3.30 P.M. Magpie Tourism
Complex Sector 16A,
Faridabad, Haryana.
Financial Year
- January 01 to December 31
Book Closure
- June 10, 2011 to June 21,
2011(Both days inclusive)
Dividend payment date
- On or after June 22, 2011
but within the statutory
time limit.
Listing on Stock Exchanges - The Bombay Stock Exchange
Ltd.*(BSE), Phiroze Jeejeebhoy
Towers Dalal Street,
Mumbai-400 001.
Listing Fees up to 20102011 duly paid.
Stock Code
- BSE - 500168
Registrar & Transfer Agents - Skyline Financial Services
Pvt. Ltd., D-153/A, 1st Floor,
Okhla Industrial Area Phase-1,
New Delhi 110 020
*During the year based on the decision taken and communicated by its Promoter, The Goodyear Tire & Rubber
Company, for delisting of its equity shares from the Bombay Stock Exchange Limited (“BSE”), in accordance
with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 ("Delisting
Regulations") either directly or through one or more of its subsidiaries. After passing of the resolution by Board
of your company, shareholders of the company approved the proposal for delisting of its equity shares on April
7, 2010 by postal ballot and BSE granted it's in principle approval on April 27, 2010.
Pursuant to the Delisting Regulations, Goodyear Orient Company Private Limited, a wholly owned subsidiary of
the promoter, The Goodyear Tire & Rubber Company, invited bids by way of public announcement dated May
13, 2010, to acquire, in accordance with the Delisting Regulations and terms and conditions set out in the Public
Announcement, up to 5,997,292 equity shares of the company, representing 26% of the equity capital (the
“Offer Shares”) for which the approval was obtained from shareholders by way of postal ballot.
The number of Offer Shares tendered by the public shareholders at or below the discovered price was less than
the minimum number of Offer Shares required to be accepted for the delisting offer to be successful in terms of
Delisting Regulations. Accordingly, the delisting offer is deemed to have failed in terms of the Delisting
Regulations.
The Company thus continues to remain listed on BSE.
Market Price Data: High, Low on Bombay Stock Exchange (BSE) during each month in the last Financial Year-2010
Price per equity share of the face value of Rs.10/- each
Price per equity share of the face value of Rs.10/- each
Month
High
Low
Month
High
January
February
March
April
May
June
207.70
295.00
296.40
298.00
409.45
278.70
175.00
180.00
278.70
280.55
262.00
224.20
July
August
September
October
November
December
260.00
249.80
305.00
300.90
288.00
287.00
Low
230.00
230.15
239.15
264.00
251.10
230.00
Goodyear Prices/BSE (Sensex) Monthly Closing
Goodyear Share Prices (Rs.)
284.85
250
17527.77 17558.71
16357.96
200
20509.09
20069.12 20032.34
19521.25
275.85
280.50
16429.55
248.50
17700.90
16944.63
17971.12
17868.29
230.85
270.55
269.10
20000
283.00
260.00
239.75
15000
188.15
150
10000
BSE Sensex
290.95
300
GOODYEAR
SENSEX
100
5000
50
0
0
Jan - Feb - Mar - Apr - May - Jun - Jul - Aug - Sep - Oct - Nov - Dec 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010
Months
42
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
registry work. The shares received for transfers
complete in all respect in physical form are registered
and dispatched normally within three weeks. Demat
confirmations are normally sent within 2 weeks and
30 days in the case of bulk request.
Share Transfer System
Skyline Financial Services Pvt. Ltd. is the Share
Transfer Agents of the Company for handling both
physical share registry work and Demat share
Distribution of Shareholding as on December 31, 2010
No. of
shares held
Folios
Shares held
Numbers
Percentage
Numbers
Percentage
Upto 500
501 - 1000
1001 - 5000
5001 - 10000
10001 and above
20,970
842
503
48
49
93.57
3.76
2.24
0.21
0.22
1,695,293
623,189
1,061,177
358,911
19,327,937
7.35
2.70
4.60
1.56
83.79
Total
22,412
100.00
23,066,507
100.00
Shareholding Pattern as on December 31, 2010
Description
of Investors
No. of
shares held
% of
shareholding
17,069,215
74.00
1,185,509
5.14
3. Foreign Institutional Investors
229,522
1.00
4. Private Corporate Bodies
749,527
3.25
5. NRIs / OCBs
185,650
0.80
3,647,084
15.81
23,066,507
100.00
1. Promoters
2. Financial Institutions, Insurance Companies,
Banks and Mutual Funds etc.
6. Indian Public
Total
Dematerialisation of shares and liquidity
21.62% of the Share Capital is held in
dematerialized form with National Securities
Depository Limited (NSDL) and Central Depository
Services (India) Ltd. (CDSL) as on December 31,
2010.
43
Unclaimed Suspense Account
The Registrar and Share Transfer Agent of the
Company i.e M/s Skyline Financial Services Pvt. Ltd. is
in the process of sending reminders asking for the
correct particulars. Accordingly, the Company will
create “Unclaimed Suspense Account” in terms of
the provisions as contained under clause 5A of the
Listing Agreement.
Outstanding GDRs/ADRs/Warrants or any
Convertible instruments, conversion date and
likely impact on equity.
The Company has not issued any GDRs/ADRs/
Warrants or any convertible instruments.
Plant location
Corporate Office
Mathura Road, Ballabgarh,
Dist. Faridabad,
Haryana - 121 004
Non Mandatory Requirements
The Company has not adopted the non mandatory
requirements as mentioned in Annexure-I D of
1st Floor, ABW Elegance Tower, amended Clause 49 of the Listing Agreement.
Plot No. 8, Commercial Centre,
Jasola, New Delhi - 110025
Investors' correspondence M/s Skyline Financial
Services Pvt. Ltd.
may be addressed to
D-153/A, 1st Floor,
Okhla Industrial Area, Phase-1,
New Delhi 110 020
Website
www.goodyear.co.in
E-mail ID
goodyearindia_investorcell@
goodyear.com
CEO/CFO Certificate
In terms of the requirement of the Clause 49, the
certificates from CEO/CFO had been obtained.
On behalf of the Board of Directors
Aurangabad
February 21, 2011
Rajeev Anand
Managing Director
Annexure-A
Corporate Governance Report
of Goodyear India Limited
Dated February 21, 2011
Declaration regarding affirmation of Code of Conduct
All the members of the Board and the senior management personnel have, for the year ended December 31,
2010, affirmed compliance with the code of conduct laid down by the Board of Directors in terms of clause 49 of
the Listing Agreement with the Stock Exchange.
Aurangabad
February 21, 2011
Rajeev Anand
Managing Director
44
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Management Discussion & Analysis
1. Industry Structure & Developments
At macroeconomic level, the Indian economy has
been experiencing strong growth, with the Central
Economic Advisory (CEA) expecting GDP up 8.5% for
2010-2011. The strong economy, coupled with
improving consumer confidence and a good
monsoon, helped spark strong demand for tractors
and passenger vehicles, the primary focus segments
for your Company.
The tractor industry in India has witnessed a growth
of 27% in 2010 (Source: Tractor Manufacturers
Association). This resulted in an increased demand
for tyres which your Company capitalized on, with
strong sales growth of tractor tyres to OEM
customers and in the replacement market.
Similarly, new passenger vehicles sales grew at
29% (Source: Society of Indian Automobile
Manufacturers), translating into strong consumer
tyres demand from OEM customers. The
replacement market increased as well, following the
brief slowdown experienced late 2008 and early
2009. This fueled strong growth in your Company's
consumer tyres sales.
2. Opportunities and Threats
The tractors and passenger vehicles markets are
expected to continue to grow briskly, which augurs
well for the future of your Company.
In the farm segment, growing levels of farm
mechanization and subsequent growth in all
agriculture related industries should provide your
Company with attractive growth prospects. Your
Company also plans to take farm tyres to a new
technological platform by introducing radial
products. Currently the farm tyre industry
predominantly sells bias products.
45
While your Company is poised to capitalize on these
opportunities, the farm tyres segment remains very
competitive. Rising raw material prices, especially
natural rubber, are expected to add to the challenges
ahead. Your Company's large customer base and
robust quality products, coupled with the
introduction of innovative products, should help
mitigate the challenges posed.
In the passenger radial segment, the increasing
sophistication of the vehicles being launched in India
provides your Company with a significant
opportunity to leverage Goodyear global technology.
Investments being made in road infrastructure
should also support new vehicles sales growth as well
as the amount people drive. Both of these are
expected to result in further growth in the segment.
However, rising and volatile raw material prices are a
concern as can be the Company's ability to recover
such increases from the market. Competitive
environment remains fierce. Low cost imported
products further add to the challenges. Your
Company remains committed to bringing in the best
technology, branding & product differentiation to
ensure it is well positioned to counter these threats.
Finally, macroeconomic indicators are always an area
of caution as most passenger vehicles are financed.
High inflation and continued increases in interest
rates could have a negative impact on sales of
passenger vehicles. Uncertainty created by monsoon
is another variable which can impact demand in the
farm segment.
3. Segment-wise/ Product-wise performance
The Company manufactures automotive bias tyres
viz. Farm tyres and Medium Commercial Truck tyres
at its Ballabgarh plant and also trades in “Goodyear”
branded tyres (including Radial passenger and Offthe-road Bias Tyres) manufactured by Goodyear
South Asia Tyres Private Limited (GSATPL)
Aurangabad, pursuant to an off-take agreement
entered into with that company. The other products
in which the Company deals in include tubes & flaps.
The sales performance during the year is as follows:
Rs. in Million
Tyres
13,005
Flaps
24
Tubes
744
Your company feels proud to have been awarded
the “Tractor Proprietary Award” for 2010 by
Mahindra & Mahindra - the largest producer of
tractors across the globe. It has also won accolades
from several other key tractor manufacturers
including M&M Swaraj and International Tractors
Ltd.
Last but not least, your Company has been awarded
the prestigious “Superbrand” status for 2010-2011
and will be featured in the upcoming edition of
Superbrands India. This recognition speaks of the
business excellence of Goodyear as a brand, and is a
rewarding reflection of the quality of the products
and services delivered by your Company.
Limited, pursuant to the off-take agreement with
the said company. This off-take agreement is on a
non-exclusive basis and can be terminated by either
party with a four months notice.
The prevailing uncertainty in some of the legal
challenges such as The Haryana Tax on Entry of
Goods Into Local Areas Act, 2008 (Entry Tax Act)
passed by the State Government of Haryana
repealing the earlier Haryana Local Area
Development Tax Act, 2000 (HLADT Act), certain
other disputes/demands raised against the
Company, arbitrary disallowances in certain tax
proceedings, untenable disputes raised by
consumers etc. are also the areas of concern
perceived by your Company.
4. Outlook
As per the Central Economic Advisory (CEA), the
Indian economy is expected to continue to grow at a
fast pace, with GDP growth forecasted at 9% for
2011-2012. However, cost and competitive
pressures are expected to stay.
In this context, your Company will continue to focus
on the review of activities in different areas of
operations under the umbrella of the Continuous
Improvement System (CIS). The CIS is an integral
part of your Company's philosophy to maximize
gains and reduce costs in order to address the
market realities.
In the tyre industry, strong growth is expected to
continue in both the farm tyres and the consumer
tyres segments. Your Company intends to maintain
its focus on the production of farm tyres to retain its
leadership in the said segment, and to further
consolidate its strong position in the consumer tyres
segment.
5. Risks and Concerns
As highlighted earlier, raw material price increases,
higher inflation levels and increasing interest rates
are areas of concerns. As your Company's products
are largely intended for sale in the domestic market,
imported tyres offered on the market at particularly
low prices are also a challenge.
Approximately 23% of the net sales of your
Company were attributable to the sale of products
procured from Goodyear South Asia Tyres Private
Your Company has blocked certain funds in order to
secure a few of these demands in terms of the court
order(s). As in the past, your Company has obtained
insurance coverage for its assets. However, no cover
for the foreign exchange risk was obtained for its
foreign exchange exposures.
6. Internal control systems and their adequacy
Your Company has a proper and adequate system
of internal control.
Your Company has an Audit Committee headed by
a non-executive independent director, inter alia, to
oversee your Company's financial reporting
process, disclosure of financial information,
performance of statutory and internal auditors,
functions, internal control systems, related party
transactions, investigations relating to suspected
fraud or failure of internal audit control, etc. as well
as other areas requiring mandatory review per
clause 49 of the Listing Agreement with the stock
exchange. The powers of the Audit Committee,
inter alia, include seeking information from any
employee, obtaining outside legal or other
professional advice and investigating any activity of
the company within the committee's term of
reference. Your Company's Internal Audit
department verifies the information concerning the
efficiency and effectiveness of its operations, the
reliability and accuracy of the financial statements as
well as the compliance with your Company policies
so as to maintain accountability of all its assets and
the authenticity and correctness of the recorded
transactions. The scope, coverage, control
46
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
weakness and other relevant issues and updates are
shared by Internal Audit at appropriate management
levels for corrective action and the progress thereof is
tracked.
7. Discussion on financial performance with
respect to operational performance
The details of the financial performance of your
Company are reflected in the Balance Sheet, Profit &
Loss Account and other Financial Statements,
appearing separately. Highlights are provided below:
Rs. in Million
Total Sales & other Income
Less: Excise Duty
Net Sales & other income
Profit Before Interest,
Depreciation & Tax
2010
2009
13,944
10,735
801
535
13,143
10,200
1,298
1,274
The financial performance of your Company has
been further explained in the Directors' Report of
your Company for the year 2010, appearing
separately.
8. Human Resources
The employee relations have remained cordial
throughout the year and industrial harmony was
maintained. Measures for the safety of the
employees, training and development continued to
receive top priority. The total number of salaried and
hourly paid associates, as at December 31, 2010,
stood at 976.
Cautionary Statement
Certain statements in the Management Discussion
and Analysis describing your Company's views about
the Industry, expectations/predictions, objectives etc.
may be forward looking within the meaning of
applicable laws and regulations. Actual results may
differ from those expressed or implied in these
statements. Your Company's operations may, inter
alia, be affected by the supply and demand
situations, input prices and availability, changes in
Government regulations, tax laws and other factors
such as industry relations and economic
developments etc. Investors should bear the above
in mind.
Auditors' Certificate regarding compliance of conditions of Corporate Governance
under clause 49 of the listing agreement
To the Members of
GOODYEAR INDIA LIMITED
We have examined the compliance of conditions of Corporate Governance by Goodyear India Limited, for the year ended December
2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchange in India.
The compliance of conditions of Corporate Governance is the responsibility of the Company's Management. Our examination was carried
out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing Agreement),
issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation thereof, adopted by the
Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on
the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied
with the conditions of Corporate Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
47
For Price Waterhouse
Firm Registration No. 301112E
Chartered Accountants
Place: Aurangabad
Dated: February 21, 2011
H.Singh
Partner
Membership No. F-86994
Auditors' Report To The Members
Of Goodyear India Limited
1.
We have audited the attached Balance Sheet
of Goodyear India Limited (the “Company”), as at
December 31, 2010, and the related Profit and Loss
Account and Cash Flow Statement for the year
ended on that date annexed thereto, which we have
signed under reference to this report. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an
opinion on these financial statements based on our
audit.
2.
We conducted our audit in accordance with
the auditing standards generally accepted in India.
Those Standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also
includes assessing the accounting principles used
and significant estimates made by Management, as
well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
3.
As required by the Companies (Auditor's
Report) Order, 2003, as amended by the Companies
(Auditor's Report) (Amendment) Order, 2004
(together the “Order”), issued by the Central
Government of India in terms of sub-section (4A) of
Section 227 of 'The Companies Act, 1956' of India
(the 'Act') and on the basis of such checks of the
books and records of the company as we considered
appropriate and according to the information and
explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4
and 5 of the Order.
4.
Further to our comments in the Annexure
referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and
explanations which, to the best of our knowledge
and belief, were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account
as required by law have been kept by the Company
so far as appears from our examination of those
books;
(c) The Balance Sheet, Profit and Loss
Account and Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit
and Loss Account and Cash Flow Statement dealt
with by this report comply with the accounting
standards referred to in sub-section (3C) of Section
211 of the Act;
(e) On the basis of written representations
received from the directors, as on December 31,
2010 and taken on record by the Board of Directors,
none of the directors is disqualified as on December
31, 2010 from being appointed as a director in terms
of clause (g) of sub-section (1) of Section 274 of the
Act;
(f) In our opinion and to the best of our
information and according to the explanations given
to us, the said financial statements together with the
notes thereon and attached thereto give, in the
prescribed manner, the information required by the
Act, and give a true and fair view in conformity with
the accounting principles generally accepted in
India:
(i)
in the case of the Balance Sheet, of the state
of affairs of the Company as at December 31, 2010;
(ii)
in the case of the Profit and Loss Account, of
the profit for the year ended on that date; and
(iii)
in the case of the Cash Flow Statement, of
the cash flows for the year ended on that date.
For Price Waterhouse
Firm Registration No. 301112E
Chartered Accountants
H. Singh
Partner
Membership Number F- 86994
Place: Aurangabad
Date: February 21, 2011
48
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Annexure To Auditors' Report
[Referred to in paragraph 3 of the Auditors'
Report of even date to the members of
Goodyear India Limited on the financial
statements for the year ended December 31,
2010]
1.
(a)
The Company is maintaining proper
records showing full particulars, including
quantitative details and situation, of fixed assets.
(b)
The fixed assets are physically verified by the
management according to a phased programme
designed to cover all the items over a period of three
years which, in our opinion, is reasonable having
regard to the size of the Company and nature of its
assets. Pursuant to the programme, a portion of the
fixed assets has been physically verified by the
Management during the year and no material
discrepancies between the book records and the
physical inventory have been noticed.
(c)
In our opinion and according to the
information and explanations given to us, a
substantial part of fixed assets has not been disposed
of by the Company during the year.
2.
(a)
The inventory (including stocks with
third parties) has been physically verified by the
management during the year. In our opinion, the
frequency of verification is reasonable.
(b)
In our opinion, the procedures of physical
verification of inventory followed by the
Management are reasonable and adequate in
relation to the size of the Company and the nature of
its business.
(c)
On the basis of our examination of the
inventory records, in our opinion, the Company is
maintaining proper records of inventory. The
discrepancies noticed on physical verification of
inventory as compared to book records were not
material.
49
3.
(a) The Company has not granted any loans,
secured or unsecured, to companies, firms or other
parties covered in the register maintained under
Section 301 of the Act.
(b) The Company has not taken any loans, secured
or unsecured, from companies, firms or other parties
covered in the register maintained under Section
301 of the Act.
4.
In our opinion and according to the
information and explanations given to us, having
regard to the explanation that certain items
purchased are of special nature for which suitable
alternative sources do not exist for obtaining
comparative quotations, there is an adequate
internal control system commensurate with the size
of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of
goods and services. Further, on the basis of our
examination of the books and records of the
Company, and according to the information and
explanations given to us, we have neither come
across nor have been informed of any continuing
failure to correct major weaknesses in the aforesaid
internal control system.
5.
According to the information and
explanations given to us, there have been no
contracts or arrangements referred to in Section 301
of the Act during the year to be entered in the
register required to be maintained under that
Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts
or arrangements does not arise.
6.
The Company has not accepted any deposits
from the public within the meaning of Sections 58A
and 58AA of the Act and the rules framed there
under.
7.
In our opinion, the Company has an internal
audit system commensurate with its size and nature
of its business.
8.
We have broadly reviewed the books of
account maintained by the Company in respect of
products where, pursuant to the Rules made by the
Central Government of India, the maintenance of
cost records has been prescribed under clause (d) of
sub-section (1) of Section 209 of the Act, and are of
the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We
have not, however, made a detailed examination of
the records with a view to determine whether they
are accurate or complete.
9.
(a)
According to the information and
explanations given to us and the records of the
Company examined by us, in our opinion, the
Company is generally regular in depositing the
undisputed statutory dues including provident fund,
investor education and protection fund, employees'
state insurance, income-tax, sales-tax, wealth tax,
service tax, customs duty, excise duty, cess and other
material statutory dues as applicable with the
appropriate authorities.
(b)
According to the information and
explanations given to us and the records of the
Company examined by us, the particulars of dues of
sales-tax and excise duty as at December 31, 2010
which have not been deposited on account of a
dispute, are as follows [Also refer Note b (iii) on
Schedule 15]:
Sr No.
1
2
Name of the
statute
Nature of dues
Central and State
Sales Tax Acts
Sales Tax / VAT
The Central Excise
Act, 1944
11.
According to the records of the Company
examined by us and the information and explanation
given to us, the Company has not defaulted in
repayment of dues to any bank as at the balance
sheet date. The Company has not issued any
debentures and further there are no dues from any
financial institutions as at the balance sheet date.
The Company has not granted any loans and
12.
advances on the basis of security by way of pledge of
shares, debentures and other securities.
The provisions of any special statute
13.
applicable to chit fund / nidhi / mutual benefit
fund/societies are not applicable to the Company.
In our opinion, the Company is not a dealer
14.
or trader in shares, securities, debentures and other
investments.
Period to
which the
amount relates
Excise Duty
Amount
(Rs. '000)
Forum where the
dispute is pending
1979-1980
1985-1988
1995-2008
50,641
First level of Appellate
Authority i.e. Assistant
Commissioner/
Deputy Commissioner/
Joint Commissioner/
Commercial Taxes
Appellate and Revisional
Board
1992-1993
45
1978-1979
1987-1988
785
2005-2010
31,675
First level of Appellate
Authority i.e. Assistant
Commissioner Central
Excise/Commissioner
Central Excise (Appeals)
(Rs.29,274 thousand
paid under protest
subsequently in
January 2011)
1997-1998
2000-2001
3,054
The Customs, Excise and
Service Tax Appellate
Tribunal (CESTAT)
Sales Tax Tribunal
High Court
50
10.
The Company has no accumulated losses as
at December 31, 2010 and it has not incurred any
cash losses in the financial year ended on that date or
in the immediately preceding financial year.
15.
In our opinion and according to the
information and explanations given to us, the terms
and conditions of the guarantees given by the
Company, for loans taken by others from banks or
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
financial institutions during the year, are not
prejudicial to the interest of the Company.
16.
The Company has not obtained any term
loans.
17.
On the basis of an overall examination of the
balance sheet of the Company, in our opinion and
according to the information and explanations given
to us, there are no funds raised on a short-term basis
which have been used for long-term investment.
18.
The Company has not made any preferential
allotment of shares to parties and companies
covered in the register maintained under Section
301 of the Act during the year.
19.
The Company has not issued any
debentures.
20.
51
The Company has not raised any money by
public issues during the year.
21.
During the course of our examination of the
books and records of the Company, carried out in
accordance with the generally accepted auditing
practices in India, and according to the information
and explanations given to us, we have neither come
across any instance of fraud on or by the Company,
noticed or reported during the year, nor have we
been informed of such case by the Management.
For Price Waterhouse
Firm Registration No. 301112E
Chartered Accountants
H. Singh
Partner
Membership Number F- 86994
Place: Aurangabad
Date: February 21, 2011
Balance Sheet
BALANCE SHEET AS AT DECEMBER 31, 2010
Schedule No.
(Note reference)
As at
December 31, 2010
(Rs.'000)
As at
December 31, 2009
(Rs.'000)
SOURCES OF FUNDS
Shareholders' Funds
Capital
Reserves and Surplus
1
2
15 (c)
Deferred Tax Liability (Net)
230,665
2,476,884
230,665
1,917,672
101,760
107,723
2,809,309
2,256,060
3,042,584
1,657,525
2,771,648
1,568,407
1,385,059
594,744
1,203,241
363,173
1,979,803
1,566,414
612,988
976,632
2,179,401
182,026
516,629
986,667
1,587,722
163,831
3,951,047
3,254,849
2,688,692
432,849
2,121,478
443,725
829,506
689,646
2,809,309
2,256,060
APPLICATION OF FUNDS
3
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work in Progress
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
4
5
6
7
8
Less: Current Liabilities and Provisions
Liabilities
Provisions
Net Current Assets
Significant Accounting Policies and
Notes to Accounts
15
This is the Balance Sheet referred to in
our report of even date.
For Price Waterhouse
Firm Registration Number : 301112E
Chartered Accountants
H.Singh
Partner
Membership No. F-86994
Place: Aurangabad
Date: February 21, 2011
The Schedules referred to above form an
integral part of the Balance Sheet.
Pierre E. Cohade
Chairman
Rajeev Anand
Vice Chairman &
Managing Director
Yashwant Singh Yadav R V Gupta
Director
Director
C Dasgupta
Director
Rajiv Lochan Jain
Director
Jean Philippe Lecerf
Chief Financial Officer
Pankaj Gupta
Company Secretary
52
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
Profit & Loss Account
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2010
Schedule No.
(Note reference)
For the year ended
December 31, 2010
(Rs.'000)
For the year ended
December 31, 2009
(Rs.'000)
13,773,592
801,314
10,685,812
534,776
12,972,278
10,151,036
171,047
48,704
13,143,325
10,199,740
6,528,379
2,888,364
4,296,745
2,660,605
4,924
(13,522)
2,423,452
1,981,668
11,845,119
8,925,496
1,298,206
1,274,244
35,569
153,386
34,034
126,089
1,109,251
1,114,121
367,103
(5,963)
-
383,302
(2,358)
2,235
748,111
730,942
Profit brought forward from
the previous year
1,033,047
571,012
PROFIT AVAILABLE
FOR APPROPRIATION
1,781,158
1,301,954
161,466
26,194
161,466
27,441
80,000
1,513,498
80,000
1,033,047
1,781,158
1,301,954
INCOME
GROSS SALES
Less: Excise Duty
9
NET SALES
Other Income
EXPENDITURE
Raw Material Consumed
Work in Process and Finished Goods
Increase / (decrease) in Excise Duty on
Finished Goods
Manufacturing, Selling and
Administrative Expenses
PROFIT BEFORE INTEREST
AND DEPRECIATION
Interest Expenses
Depreciation (net)
10
11
12
13
14
15(n)
PROFIT BEFORE TAX
Provision for Taxation :
- Current Tax
- Deferred Tax
- Fringe Benefit Tax
PROFIT AFTER TAX
15(c)
APPROPRIATIONS
53
Proposed Dividend
Tax on Dividend (net of Rs. 623 of tax
rate change for previous year)
General Reserve
Balance carried to Balance Sheet
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2010
Schedule No.
(Note reference)
For the year ended
December 31, 2010
(Rs.'000)
BASIC AND DILUTED
EARNINGS PER SHARE (Rs.)
Face Value of each equity share (Rs.)
Significant Accounting Policies and
Notes to Accounts
15(r)
For the year ended
December 31, 2009
(Rs.'000)
32.43
31.69
10
10
15
This is the Profit & Loss Account referred to in
our report of even date.
The Schedules referred to above form an
integral part of Profit & Loss Account.
For Price Waterhouse
Firm Registration Number : 301112E
Chartered Accountants
Pierre E. Cohade
Chairman
Rajeev Anand
Vice Chairman &
Managing Director
Yashwant Singh Yadav
Director
R V Gupta
Director
H.Singh
Partner
Membership No. F-86994
C Dasgupta
Director
Rajiv Lochan Jain
Director
Jean Philippe Lecerf
Chief Financial Officer
Pankaj Gupta
Company Secretary
Place: Aurangabad
Date: February 21, 2011
54
WHEEL OF FORTUNES
GOODYEAR ANNUAL REPORT 2010
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2010
For the year ended
December 31, 2010
(Rs.'000)
A) CASH FLOW FROM OPERATING ACTIVITIES :
Profit before tax
Adjustments for non cash / non operating items
Depreciation
(Profit) / Loss on sale of fixed assets (net)
Interest expenses
Interest income
Liabilities / provisions no longer required written back
Provision for doubtful debts and advances
Provision for Gratuity
Provision for Leave Encashment
Unrealised foreign exchange loss
For the year ended
December 31, 2009
(Rs.'000)
1,109,251
153,386
(214)
35,569
(54,331)
(75,707)
6,576
16,577
16,701
3,956
Operating profit before working capital changes
102,513
1,114,121
126,089
868
34,034
(17,801)
(7,054)
8,517
15,590
13,821
20,188
1,211,764
194,252
1,308,373
Adjustments for working capital :
Decrease in Sundry debtors
(Increase) in Loans and advances
(Increase) / Decrease in Inventories
Increase in Sundry creditors and other payables
10,023
(20,529)
(96,359)
677,583
Cash generated from operations
570,718
30,361
(54,123)
197,423
362,685
1,782,482
Direct taxes paid
Tax Deducted at Source
Fringe Benefit Tax
(316,640)
(5,870)
-
Net cash flow from operating activities
(322,510)
536,346
1,844,719
(374,041)
(2,702)
(3,887)
1,459,972
(380,630)
1,464,089
B) CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of fixed assets
Interest received
Sale proceeds of fixed assets
(705,516)
50,548
5,481
Net Cash used in investing activities
(237,173)
15,665
947
(649,487)
(220,561)
C) CASH FLOW FROM FINANCING ACTIVITIES :
Interest paid
Dividends paid
(29,664)
(184,647)
(32,541)
(159,391)
Net Cash used in financing activities
(214,311)
(191,932)
Net Increase in cash and cash equivalents (A+B+C)
Cash and bank balance as at beginning of year
Unrealised foreign exchange (loss)
Cash and bank balance as at end of the year
596,174
1,587,722
(4,495)
1,051,596
552,293
(16,167)
2,179,401
1,587,722
Notes:
1.
2.
3.
4.
5.
The above Cash Flow Statement has been prepared under the indirect method set out in Accounting Standard - 3 on"Cash Flow Statement" notified by the Government of India under the
Accounting Standard Rules, 2006.
Cash and bank balance as at end of the year includes Rs. 125 (Previous year Rs.2,483) against bank guarantees and Rs. Nil (Previous year Rs. 26,159 ) deposits in favour of Hon'ble Court of
Additional District Judge , New Delhi. Amount not available for use by the company Rs. 11,181 ( previous year Rs. 7,545 )
Figures in brackets indicate cash outflow.
Previous year figures have been regrouped and recast, wherever necessary, to conform to the current year's classification.
The schedules referred to in the Balance Sheet and Profit & Loss Account form an integral part of the Cash Flow Statement.
This is the Cash Flow Statement referred to in our report of even date.
55
For Price Waterhouse
Firm Registration Number : 301112E
Chartered Accountants
H.Singh
Partner
Membership No. F-86994
Place: Aurangabad
Date: February 21, 2011
Pierre E. Cohade
Chairman
Rajeev Anand
Vice Chairman &
Managing Director
Yashwant Singh Yadav
Director
C Dasgupta
Director
Rajiv Lochan Jain
Director
Jean Philippe Lecerf
Chief Financial Officer
R V Gupta
Director
Pankaj Gupta
Company Secretary
Schedules And Notes
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE 1
As at
December 31, 2010
(Rs.'000)
As at
December 31, 2009
(Rs.'000)
Authorised
30,000,000 (30,000,000) Equity Shares
of Rs.10 each
300,000
300,000
Issued, Subscribed and Fully Paid-up
23,066,507 (23,066,507) Equity Shares
of Rs.10 each
230,665
230,665
CAPITAL
Notes:
1)
2)
17,069,215 (17,069,215) shares are held by The Goodyear Tire & Rubber Company, Akron, Ohio, USA (the Holding Company) of which 1,203,926
(1,203,926) shares are allotted as fully paid up pursuant to a contract without payment being received in cash.
12,159,379 (12,159,379) shares were allotted as fully paid up by way of bonus shares by capitalisation of General Reserve Rs. 114,188(Rs. 114,188)
and Share Premium Account Rs. 7,406 (Rs. 7,406).
SCHEDULE 2
RESERVES AND SURPLUS
As at
January 01, 2010
(Rs.'000)
Additions
(Rs.'000)
Deductions
(Rs.'000)
As at
December 31, 2010
(Rs.'000)
631,378
220,000
33,247
1,033,047
80,000
480,451
1,239
-
631,378
300,000
32,008
1,513,498
1,917,672
560,451
1,239
2,476,884
Share Premium
General Reserve
Revaluation Reserve
Profit & Loss Account
SCHEDULE 3
FIXED ASSETS
(Rs.'000)
Gross Block
Depreciation
Deductions/
adjustments
during the year
As at
December
31, 2010
As at
January
1, 2010
Net Block
As at
January
1, 2010
Additions
during
the year
Charged
Deductions/
during
adjustments
the year* during the year
As at
December
31, 2010
As at
December
31, 2010
As at
December
31, 2009
Freehold
Land
17,309
-
-
17,309
-
-
-
-
17,309
17,309
Buildings
317,918
3,583
43
321,458
123,159
9,850
43
132,966
188,492
194,759
2,332,882
331,517
69,189
2,595,210
1,364,813
139,181
64,813
1,439,181
1,156,029
968,069
15,722
2,633
616
17,739
9,484
2,390
533
11,341
6,398
6,238
9,760
3,977
926
12,811
3,374
962
118
4,218
8,593
6,386
78,057
-
-
78,057
67,577
2,242
-
69,819
8,238
10,480
TOTAL
2,771,648
341,710
70,774
3,042,584
1,568,407
154,625
65,507
1,657,525
1,385,059
1,203,241
Previous
Year
2,641,423
179,956
49,731
2,771,648
1,488,966
127,357
47,916
1,568,407
Tangible
Plant &
Machinery
Furniture &
Fittings
Vehicles
Intangible
Software
Capital Work in Progress
including capital advances of Rs. 32,246 ( Rs. 62,421 ) and capital goods intransit of Rs. 10,377 ( Rs. 160,777 )
Notes
1. Gross Block includes Rs. 148,015 (Rs. 158,185 ) on account of revaluation of certain fixed assets in 1984.
Amount added to fixed assets on revaluation was credited to revaluation reserve.
2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 68,939 (Rs.141,073 ).
*3. Refer note ' n ' & ' o ' on Schedule 15
56
594,744
1,979,803
363,173
1,566,414
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE 4
INVENTORIES
As at
December 31, 2010
(Rs.'000)
Raw Materials*
Work in Process
Finished Goods **
Stores and spare parts ***
As at
December 31, 2009
(Rs.'000)
238,183
32,928
233,631
108,246
207,015
30,370
179,203
100,041
612,988
516,629
* Including inventory intransit Rs.6,499 (Rs. 42,962)
** Including inventory intransit Rs.19,397(Rs.19,187)
*** Net of Obsolescence provision Rs.40 (Rs. 40 ) and including inventory intransit of Rs.3,751 (Rs. 889)
SCHEDULE 5
SUNDRY DEBTORS
As at
December 31, 2010
(Rs.'000)
As at
December 31, 2009
(Rs.'000)
(Considered good, unless otherwise stated)
Debts - Over six months
Unsecured
[Considered Doubtful Rs. 25,316 (Rs. 28,350) and fully provided for]
Other debts
Secured
Unsecured
SCHEDULE 6
CASH AND BANK BALANCES
Cash in hand
Cheques in hand
Cash in Transit
With Scheduled Banks on
Current Accounts
Deposit Accounts*
Dividend Accounts
-
-
131,589
845,043
182,303
804,364
976,632
986,667
As at
December 31, 2010
(Rs.'000)
As at
December 31, 2009
(Rs.'000)
200
40,755
2,452
175
20,309
219
484,672
1,640,141
11,181
733,316
826,158
7,545
2,179,401
1,587,722
* Includes Rs. 125 (Rs.2,483) against bank guarantees and Rs.Nil (Rs. 26,159 ) deposits in favour of Hon'ble Court of Additional District Judge ,New Delhi.
SCHEDULE 7
LOANS AND ADVANCES
57
As at
December 31, 2010
(Rs.'000)
As at
December 31, 2009
(Rs.'000)
Unsecured - Considered good
Unless otherwise stated
Advances recoverable in cash or in kind or for value to be received
[Considered Doubtful Rs.13,117 (Rs. 12,200) and fully provided for]
Balance with Customs and Excise
166,312
148,117
15,714
15,714
182,026
163,831
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE 8
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Acceptances
Sundry creditors (Refer note ' t ' on schedule 15)
- Due to Micro Enterprises and Small Enterprises
- Due to other than Micro Enterprises and Small Enterprises
Security deposits
Investor Education and Protection fund
shall be credited by :
- Unpaid dividend*
Other liabilities
Provisions
Income Tax (Net of advance)
Gratuity
Leave Encashment
Interest on Provident Fund Contributions
Product Replacement Loss**
Proposed Dividend
Tax on proposed dividend
Others**
**Refer note 'p' on schedule 15
As at
December 31, 2010
(Rs.'000)
As at
December 31, 2009
(Rs.'000)
549,911
1,803,249
1,803,249
220,559
210,536
1,569,690
1,569,690
256,594
11,181
103,792
7,545
77,113
2,688,692
2,121,478
51,854
101,973
28,167
4,833
16,336
161,466
26,817
41,403
9,873
96,005
24,501
3,731
13,842
161,466
27,441
106,866
432,849
443,725
* No amount is due as on December 31, 2010 for credit to Investors' Education and Protection Fund. Amount remaining due after adjustment of
amounts to be claimed from the Company will be transferred on the respective due dates to the said Fund.
58
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT
SCHEDULE 9
For the year ended
December 31, 2010
SALES (GROSS)
Class of goods sold
Unit
Automotive Tyres
Flaps
Automotive Tubes
(Nos.)
(Nos.)
(Nos.)
For the year ended
December 31, 2009
Quantity*
(000)
Value
(Rs.'000)
Quantity*
(000)
Value
(Rs.'000)
2,660
102
1,682
13,005,398
23,911
744,283
2,298
256
1,495
9,973,625
56,208
655,979
13,773,592
10,685,812
*Unit sales include inventory adjustments and debits raised for Company's own use.
For the year ended
December 31, 2010
(Rs.'000)
SCHEDULE 10
OTHER INCOME
Profit on sale of fixed assets (net)
Miscellaneous Income
Liabilities / Provision no longer required written back
(also refer note 'p' on Schedule 15)
Interest on :
- deposits (Gross of tax deducted at source Rs 5,184 (Rs 1,854))
- others
Mould usage charges
Commission received
For the year ended
December 31, 2009
(Rs.'000)
214
33,486
75,707
19,660
7,054
54,101
230
88
7,221
17,476
325
263
3,926
171,047
48,704
For the year ended
December 31, 2010
For the year ended
December 31, 2009
Notes:
1. Miscellaneous income includes scrap sale of Rs. 27,925 (Rs. 11,290)
SCHEDULE 11
RAW MATERIAL CONSUMED
Rubber
Fabrics
Carbon black
Pigments and chemicals
Beadwire
Others {net of scrap sales of Rs 22,276 (Rs 18,952)}#
59
Quantity
('000 Kgs.)
Value
(Rs.'000)
Quantity
('000 Kgs.)
Value
(Rs.'000)
27,800
2,945
14,365
7,347
1,611
4,266,659
717,673
776,361
625,098
93,247
49,341
24,893
2,897
13,064
6,818
1,463
2,470,380
611,883
588,400
495,759
83,754
46,569
6,528,379
4,296,745
# It is not practicable to furnish quantitative information in respect of such items due to different size, unit of measurement, each being less than
10% of total value.
SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT
SCHEDULE 12
For the year ended
December 31, 2010
(Rs.'000)
WORK IN PROCESS AND FINISHED GOODS
Opening stock
-Work in Process
-Finished Goods
30,370
179,203
Add:
Purchases of Finished Goods
For the year ended
December 31, 2009
(Rs.'000)
209,573
9,162
399,992
409,154
2,945,350
2,461,024
3,154,923
2,870,178
Less:
Closing Stock
32,928
233,631
-Work in Process
-Finished Goods
266,559
30,370
179,203
2,888,364
209,573
2,660,605
VALUE AND QUANTITATIVE BREAK-UP OF FINISHED GOODS
Opening stock
Purchases
Closing Stock
Quantity
(000)
Value
(Rs.'000)
Quantity
(000)
Value
(Rs.'000)
Quantity
(000)
Value
(Rs.'000)
Automotive Tyres
(Nos)
42
(109)
142,512
(344,587)
1387
(1076)
2,936,065
(2,441,684)
48
(42)
188,940
(142,512)
Flaps
(Nos)
32
(32)
4,639
(6,916)
10
(50)
2,925
(11,120)
17
(32)
3,250
(4,639)
Automotive Tubes
(Nos)
98
(121)
32,052
(48,489)
19
(21)
6,360
(8,220)
120
(98)
41,441
(32,052)
179,203
(399,992)
2,945,350
(2,461,024)
233,631
(179,203)
60
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT
SCHEDULE 13
MANUFACTURING, SELLING AND ADMINISTRATIVE EXPENSES*
Salaries, wages and bonus
Contribution to provident and other funds
Workmen and staff welfare expenses
Retirement gratuities
Leave encashment
Consumption of stores and supplies
Power and fuel
Travelling
Repairs and maintenance
-Buildings**
-Machinery**
- Others
Stores and spares written off
Rent
Insurance
Provision for doubtful debts and advances
Telecommunication
Rates and taxes
Legal and professional
Carrying and forwarding agent expenses
Freight, transport and delivery
Provision for Replacement Loss
Advertising and sales promotion
Trademark fee
Regional Service Charges
Commission
Cash Discounts
Bank Charges
Conversion charges
Loss on sale / deletion of fixed assets (etc.)
Exchange loss
Bad debts written off
Less: Provision for doubtful debts
Miscellaneous
8,693
(8,693)
For the year ended
December 31, 2010
(Rs.'000)
For the year ended
December 31, 2009
(Rs.'000)
471,272
32,580
45,253
16,577
16,701
15,974
308,965
68,859
406,927
34,709
37,031
15,590
13,821
15,966
276,456
60,256
2,106
48,611
1,641
1,740
53,131
9,478
6,576
15,312
31,776
23,596
26,817
273,519
2,494
99,126
92,521
262,882
1,586
249,823
2,216
97,770
8,004
4,317
52,703
921
6,994
32,830
4,365
8,517
14,767
35,324
20,849
24,637
230,985
115,406
77,881
5,813
230,388
5,076
106,392
868
26,516
136,546
2,423,452
3,117
(3,117)
115,363
1,981,668
*includes expenditure on research and development Rs 2,996 (Rs.1,866)
**includes consumption of spares Rs 30,284 (Rs 31,198 )
SCHEDULE 14
INTEREST EXPENSES
Others
61
For the year ended
December 31, 2010
(Rs.'000)
35,569
35,569
For the year ended
December 31, 2009
(Rs.'000)
34,034
34,034
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
SCHEDULE 15
NOTES TO ACCOUNTS
(a) SIGNIFICANT ACCOUNTING POLICIES
i)
Accounting Convention
These financial statements have been prepared to
comply in all material aspects with all the applicable
accounting principles in India, the applicable
accounting standards notified u/s 211(3C) of the
Companies Act, 1956 and are based on the
historical cost convention as modified to include the
revaluation of certain fixed assets.
ii) Fixed Assets
Gross fixed assets are stated at cost of
acquisition/construction and assets taken on finance
lease on or after January 1, 2002 are stated at lower
of the fair value/present value of the minimum lease
payments at the inception of the lease. The figures of
land, buildings and factory plant and machinery,
which have been revalued during the year 1984, are
on the basis of valuation report of an approved
valuer.
iii) Depreciation/ Amortisation
a) The Company follows straight line method of
depreciation in respect of all its fixed assets
including assets taken on finance lease, as per
Schedule XIV to the Companies Act, 1956,
except (c) & (d).
b) As per technical evaluation, Plant and
Machinery is treated as Continuous Process
Plant as defined in Schedule XIV to the
Companies Act, 1956 and the depreciation has
been provided accordingly.
c) Depreciation has been provided in respect of
certain category of Plant and Machinery
(including machinery spares of irregular nature)
as per technical assessment by the management
based on straight line method over the useful life
of 5-10 Years.
d) The depreciation on assets revalued as at
December 31, 1984, is provided on the basis of
the residual life as per the technical estimation
by the valuer.
e) Intangible Assets: Softwares are amortised over
a period of 6 years based on the estimated
economic useful life of the asset.
f)
The depreciation on the assets capitalised during
the year is charged from beginning of the month
following the date of capitalisation.
iv) Inventories
Inventories are valued at lower of cost and net
realisable value. Cost includes cost of purchase,
conversion costs and appropriate production
overheads incurred in bringing the inventories to
their present location and condition and is net of
Cenvat. Finished goods are inclusive of Excise duty.
The basis of determining cost for various categories
of inventories is as follows:
Raw Materials
Stores and Spare parts
Work in Progress and
Finished Goods
}
Weighted average
Weighted average
Materials and
appropriate share
of labour and
overheads
Inventories have been disclosed net of provision for
obsolescence, if any. Provision for inventory
obsolescence is determined based on
management's estimate.
v) Research and Development Expenditure
The revenue expenditure on research and
development is expensed under the respective heads
in the year in which it is incurred.
vi) Revenue Recognition
Sale of goods is recognised at the point of despatch
of finished goods to customers. Sales exclude sales
tax and is net of rebates & trade discounts and sales
returns.
vii) Employee Benefits
The Company has Defined Contribution plans for
post employment benefits' namely Provident Fund,
Employee State Insurance Scheme, Employee
Pension Scheme and Superannuation Fund. The
62
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
contributions to Superannuation and Provident
Funds are administered by trusts, which are
recognised by the Income Tax authorities. The
Company's contributions in all the above plans are
charged to revenue every year.
The Company has Defined Benefit plans namely
leave encashment/compensated absence, Gratuity
for employees and shortfall in interest on Provident
fund balance, the liability for which is determined on
the basis of an actuarial valuation at the end of the
year. Gains and losses arising out of actuarial
valuations are recognised immediately in the Profit
and Loss Account as income or expense.
viii) Taxation
Provision for income tax is computed in accordance
with the provisions of Income-tax Act, 1961.
Deferred tax is recognised, subject to the
consideration of prudence, on timing differences,
being the difference between taxable income and
accounting income that originate in one period and
are capable of reversal in one or more subsequent
periods. Deferred tax assets are carried forward to
the extent it is reasonably certain that sufficient
future taxable income will be available against
which such deferred tax assets can be realised.
Deferred tax is recognised at the rate substantially
enacted at the balance sheet date.
ix) Foreign Currency Translations
Transactions in foreign currency are recorded at the
exchange rates prevailing at the time of the
transactions. Exchange gain / loss on translation of
monetary assets and liabilities are recognised in the
Profit and Loss Account.
x) Lease rental
Lease rentals in respect of operating lease entered
on and after January 1, 2002 are charged to the
(b) CONTINGENT LIABILITIES*
63
(i) Bills discounted
(ii) Guarantee to Gurgaon Gramin Bank
(iii) Claims against the Company not acknowledged as debts
Rent cases
Sales Tax
Excise & Service Tax Matters
Income Tax Matters
Price Differential pending settlement
Others
*(excluding interest and penalty, if any)
Profit and Loss Account on a straight-line basis over
the lease term.
xi) Borrowing Costs
Borrowing costs that are directly attributable to the
acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of
that asset. Other borrowing costs are recognised
as an expense in the period in which they are
incurred.
xii) Impairment of Assets
At each Balance Sheet date, the Company assesses
whether there is any indication that assets may be
impaired. If any such indication exists, the Company
estimates the recoverable amount. If the carrying
amount of the assets exceeds its recoverable
amount, an impairment loss is recognised in the
accounts to the extent the carrying amount exceeds
the recoverable amount.
xiii) Provisions and Contingencies
Provisions are recognised when the Company has a
present obligation as a result of past events, for
which it is probable that an outflow of resources will
be required to settle the obligation and a reliable
estimate of the amount can be made. Provisions
required to settle are reviewed regularly and are
adjusted where necessary to reflect the current best
estimates of the obligation.
Product replacement loss is determined on the basis
of past experience and best estimates of
management.
Contingencies are disclosed unless the likelihood of
an outflow of resources is remote and there is a
possible obligation or a present obligation that may,
but probably will not, require an outflow of
resources.
As at
As at
December 31, 2010 December 31, 2009
(Rs.'000)
(Rs.'000)
14,957
11,765
11,833
43,875
30,176
82,714
48,447
47,392
28,146
43,875
19,733
50,552
15,281
31,856
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
(iv) During the year 2003, a demand of Rs. 66,222 thousand
besides interest, was raised by the Haryana Urban
Development Authority (HUDA) towards external
development charges (EDC) which was challenged by the
Company. During June 2009, the court of Hon'ble
Additional Civil Judge (Senior Division) (First Court)
passed an interim order whereby the Company was
directed to pay interest @ 10% for delayed payment
amounting to Rs. 476 thousand which was duly paid.
During the year the entire demand has been set aside by
the First Court. However, HUDA challenged the same
before the Court of Hon’ble District & Session Judge,
Faridabad. As the Company had, in earlier years, already
paid EDC, based on legal opinion and management
assessment the Company is of the view that no additional
demand is legally tenable.
(v) In the year 2007, Hon'ble Punjab & Haryana High Court at
Chandigarh, on a reference from the Hon'ble Supreme
Court of India, had held the Haryana Local Area
Development Tax (HLADT) as unconstitutional.
Subsequently in the year 2008 the state of Haryana
introduced "Haryana Tax on Entry of Goods Into Local
Area Act, 2008" (Entry Tax) by repealing the Haryana
Local Area Development Tax Act, 2000 and the same was
also held unconstitutional by the Hon'ble Punjab &
Haryana High Court.
Earlier based on the legal opinion obtained by the
Company and management's assessment, provision
towards liability for Haryana Local Area Development Tax
(HLADT) for the periods prior to March 2008 aggregating
to Rs. 540 lacs was written back during the year 2008.
The amount already paid for HLADT till December 2006
and expensed in earlier years is Rs.1,938 lacs.
Pursuant to an interim order of Hon'ble Supreme Court in
October 2009, there is a stay on recovery of tax with a
direction to assessees for filing their returns of tax and
giving undertaking that in the event of their losing the
matter, they will deposit the tax along with the interest at
a rate which will be determined by the court. During the
year 2010 on the matter being heard by a bench of five
Hon'ble judges of the Hon'ble Supreme Court, it was
requested to Hon'ble Chief Justice of India to refer the
matter to a suitable larger bench for deciding the
consitutional validity of the levy. The larger bench of
Hon'ble Supreme Court is yet to be constituted.
However, based on legal opinion obtained by the
Company and management assessment, no provision for
HLADT and Entry tax has been considered necessary.
(vi) In respect of certain assessment years under Income Tax
laws there are appeals / objections pending before the
Hon'ble Supreme Court / Hon'ble High Court / Income tax
Appellate Tribunal / Dispute Resolution Panel etc., against
which based on the expert opinion the management
does not consider any cash outflow at this stage.
(c) Major components of Deferred Tax arising on account of temporary timing differences are:
As at
January 1, 2010
(Rs.'000)
For the Year
(Rs.'000)
As at
December 31, 2010
(Rs.'000)
173,774
(5,644)
168,130
Deferred tax assets
a) Contingent Provisions
b) Provision for Employee Benefits
c) Provision for doubtful debts / advances
13,688
40,960
11,403
(4,919)
3,875
1,363
8,769
44,835
12,766
Total Assets
66,051
319
66,370
107,723
110,081
(5,963)
(2,358)
101,760
107,723
Deferred tax liability
Depreciation
Deferred Tax Liability (Net)
Previous Year
64
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
For the year ended
December 31, 2010
(Rs.'000)
For the year ended
December 31, 2009
(Rs.'000)
(d) CIF value of imports
Raw Materials
Components and Spare parts
Capital Goods
889,178
5,122
100,577
511,987
16,605
182,652
384,613
1,586
2,211
92,521
262,882
22,296
101,096
3,880
2,418
77,881
7,745
(e) Expenditure in foreign currency
Import of finished goods
Commission on exports
Travel
Trademark usage charges
Regional Service Charges
Others
(f) Amount remitted during the year in foreign
currency on account of dividend:
(i) Number of non-resident shareholders
(ii) Number of shares held by non-resident
shareholder on which dividend was due
(iii) Amount remitted
(iv) Year to which dividend related
1
17,069,215
1
17,069,215
119,485
2009
102,415
2008
594,019
7,221
13,821
3,830
140
572,050
3,926
3,242
542
15,861
14,425
5,407
1,467
2,311
780
2,546
3,305
388
760
25,826
21,424
(g) Earnings in foreign exchange
FOB value of goods exported
Commission received
Recovery for deputation of employees
Sale of Capital Items
Sale of Raw Materials & others
(h) Managerial Remuneration
Managerial remuneration*
- Remuneration to whole-time directors
[Including perquisites Rs. 4,169 (Rs. 4,338)]
- Commission/ Bonus
- Contribution to Funds
- Gratuity and Leave Encashment
- Directors' fees
*Net of settlement of Mr.Prabhakar Jain- Rs. Nil (Rs.2,816)
Computation of net profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956:
Profit before taxation
Add:
Managerial remuneration
Depreciation
(Profit) / Loss on account of sale of assets (net)
Provision for doubtful debts & advances
65
Deduct:
Depreciation computed u/s 350 of the Companies Act, 1956
(Profit) / Loss on account of sale of assets (net)
Bad debts written off
Net profit for the year u/s 349 of the Companies Act, 1956
Managerial remuneration including Commission 10%
Restricted to
1,109,251
1,114,121
25,826
153,386
(214)
6,576
21,424
126,089
868
8,517
153,386
(214)
8,693
126,089
868
3,117
1,132,960
1,140,945
113,296
25,826
114,095
21,424
* Includes remuneration of Rs.7,191 subject to approval of the shareholders in the ensuing AGM and Rs.3,268 subject to approval of the Central Government.
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
For the year ended
December 31, 2010
(Rs.'000)
(i) Auditors' remuneration
Statutory auditors
As auditors
In other capacity
Tax accounts
Various certificates/reports
Out of pocket expenses
Cost auditors
As Cost auditors
Out of pocket expenses
For the year ended
December 31, 2009
(Rs.'000)
3,200
3,050
700
2,800
403
700
2,655
317
120
25
120
25
(j) Quantitative information in respect of each class of goods manufactured during the year
Quantity
Installed Capacity*
Automotive tyres
(Nos.)
Actual Production
1422 (1,258)
1279 (1,155)
Note:
1. The installed capacity is as certified by the Management and relied upon by the auditors' being a technical matter.
2. Production does not include conversion by outside sources:
Tubes (Nos.) 1,685 (1,451)
Flaps (Nos.)
77
(206)
*Delicensed.
(k) Consumption of raw materials, stores, spare parts and components:
For the year ended
December 31, 2010
Raw Materials
(Rs.'000)
Imported
Indigenous
1,008,163
5,520,216
6,528,379
% Stores, Spare Parts
and Components
(Rs.'000)
15.4
84.6
450
45,808
46,258
For the year ended
December 31, 2009
%
Raw Materials
(Rs.'000)
1.0
99.0
632,393
3,664,352
4,296,745
% Stores, Spare Parts
and Components
(Rs.'000)
14.7
85.3
1,087
46,077
47,164
%
2.3
97.7
(l) As the Company's business activity falls within a single primary business segment viz. 'Automotive
tyres, tubes, flaps and related rubber products', the disclosure requirements of Accounting Standard
(AS-17) “Segment Reporting” are not applicable.
(m) Disclosures under Accounting Standard 18:
I) List of related parties with whom the Company had transactions during the year.
Holding company:
The Goodyear Tire & Rubber Co., Akron, Ohio, USA.
66
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
Fellow subsidiaries:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
xii)
xiii)
Goodyear International Corporation
Goodyear Dunlop Tires Operations SA
Goodyear Middle East, FZE
Goodyear Earthmovers Pty Ltd.
Goodyear Dalian Tire Company Limited
Goodyear & Dunlop Tyres (NZ) Ltd.
Goodyear Dunlop Italia
Goodyear (Thailand) Public Company Limited
Goodyear Taiwan Limited
Goodyear Do Brasil Produtos De Borracha Ltd.
Goodyear De Colombia S.A.
Goodyear Great Britain Ltd.
P T Goodyear Indonesia TBK
xiv)
xv)
xvi)
xvii)
xviii)
xix)
xx)
xxi)
xxii)
xxiii)
xxiv)
xxv)
Goodyear SA (Luxembourg)
Compania Goodyear Del Peru SA
Goodyear South Africa (Pty) Limited
Goodyear Wingfoot KK
Goodyear Philippines Inc.
Goodyear Lastikleri T.A.S.
Goodyear Dunlop Tires, France
Goodyear Singapore Tyres
Goodyear Marketing & Sales SDN Bhd.
TC Debica SA.
Goodyear & Dunlop Tyres (Australia) Pty Ltd.
Goodyear South Asia Tyres Private Limited
Key management personnel:
i)
ii)
iii)
iv)
Mr. Rajeev Anand
Mr. Hugo O Dedekind (upto March 31, 2010)
Mr. Yashwant Singh Yadav (effective November 01, 2010)
Mr. Jean Philippe Lecerf (effective July 01, 2010)
II) Transactions with related parties on an arms' length basis
For the year ended
December 31, 2010
(Rs.'000)
For the year ended
December 31, 2009
(Rs.'000)
119,485
148,746
1,377
92,521
4,393
307
661
262,882
102,415
107,405
77,881
598
-
2,484,849
27,325
16,945
52,777
4,294
21,779
169,232
2,237
2,317,756
2,500
3,198
2,306
2,128
87,770
3,556
Holding company:
Dividend paid
Purchase of raw materials, finished goods & spare parts
Sale of finished goods
Expenditure for Trademark fee
Expense reimbursed to holding company
Reimbursement of Expense by Holding Company
Recovery for Deputation of Employees
Expenditure for Regional Service Charges
Fellow subsidiaries:
67
Purchase of raw material, finished goods & spare parts etc.
Goodyear South Asia Tyres Private Limited
Goodyear Dalian Tire Company Limited
Goodyear (Thailand) Public Company Limited
PT Goodyear Indonesia TBK
Goodyear Dunlop Tires Operations SA
Goodyear Marketing & Sales SDN Bhd
Goodyear Earthmovers Pty Ltd, Australia
Others
-Net of Recovery for Replacement Loss Rs.39,665 (Rs. 31,316)
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
For the year ended
December 31, 2010
(Rs.'000)
Sale of finished goods
Goodyear & Dunlop Tyres (Australia) Pty. Ltd.
Goodyear Dunlop Tires Germany Gmbh
Goodyear Great Britain Ltd.
Goodyear Middle East FZE
Goodyear South Africa (Pty) Ltd.
Goodyear Singapore Tyres
Goodyear International Corporation
Others
For the year ended
December 31, 2009
(Rs.'000)
186,309
2,284
58,212
14,618
5,982
21,366
17,226
83,703
16,554
1,079
79,632
29,469
22,517
7,137
19,282
Purchase of Capital Items
Goodyear Dunlop Tires Operations SA
Goodyear Philippines Inc.
Goodyear International Corporation
Goodyear South Asia Tyres Private Limited
Others
37,867
24,359
59,178
1,848
40,678
116,969
17,043
8,649
153
Recovery for deputation of employees
Goodyear Singapore Pvt. Ltd.
Goodyear Marketing & Sales SDN Bhd
P T Goodyear Indonesia TBK
Goodyear Dalian Tire Co. Limited
9,918
1,569
1,114
559
377
1,569
1,296
-
-
2,725
7,221
3,926
88
265
Sale of Raw Material, spare parts etc. and other charges
Goodyear South Asia Tyres Private Limited
Others
42,583
140
19,316
542
Expenses recovered from related parties
Goodyear Dalian Tire Company Limited
Goodyear Marketing & Sales SDN Bhd
Goodyear Philippines Inc.
Goodyear Singapore Tyres
Goodyear South Asia Tyres Private Limited **
Others
646
52
51
709
14,349*
892
Commission paid
Goodyear Middle East, FZE
Commission received on supplies
Goodyear Earthmovers Pty Ltd.
Mould usage charges received
Goodyear South Asia Tyres Private Limited
62
57
90
4,993
-
* Net of reimbursement
Reimbursement of expenses to related parties
Goodyear (Thailand) Public Co. Limited
Goodyear Singapore Tyres
Others
1,495
558
1,119
809
106
68
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
As at
December 31, 2010
(Rs.'000)
Reimbursement of Product Warranty Claim
Goodyear Dunlop Tires Operations SA
Sale of Capital Items
Goodyear Lastikleri T.A.S
PT Goodyear Indonesia TBK
Interest Paid
Goodyear South Asia Tyres Private Limited **
Key management personnel:
Remuneration paid to key management personnel
As at
December 31,2009
(Rs.'000)
9,708
-
3,231
599
-
4,803
-
27,490
21,424
** Transactions to the extent determinable pursuant to an offtake agreement.
III) Balances outstanding at the year end
Holding company:
Trade Payables
Other Receivable
Fellow subsidiaries:
Trade Payable
Goodyear South Asia Tyres Private Limited
Goodyear Dunlop Tires Operations SA
Goodyear Philippines Inc.
Goodyear Earthmover Pty Limited, Australia
P.T. Goodyear, Indonesia TBK
Others
69
As at
December 31, 2010
(Rs.'000)
As at
December 31,2009
(Rs.'000)
69,816
640
29,916
-
349,080
9,447
74,455
16,327
27,154
345,258
39,790
113,474
21,297
1,829
14,126
Trade Receivable
Goodyear International Corporation
Goodyear Middle East, FZE
Goodyear & Dunlop Tyres (Australia) Pty. Ltd.
Goodyear South Africa (Pty) Limited
Goodyear Singapore Tyres
C.A. Goodyear De Venezuela
Goodyear South Asia Tyres Private Limited
Goodyear Lastikleri TAS,
Goodyear Earthmover Pty Limited, Australia
Others
4,088
7,088
41,036
3,154
23,107
3,081
2,161
3,037
5,381
22,655
16,715
7,967
4,721
5,145
833
3,265
Other Receivable
Goodyear Marketing & Sales, BHD, Malaysia
Goodyear South Asia Tyres Private Limited
P.T. Goodyear Indonesia
Goodyear Singapore Private Limited
Others
127
10,650
3,695
478
567
2,469
899
89
(n) The depreciation charge for the current year represents gross Rs 154,625 (Rs. 127,357) less transfer
from revaluation reserve Rs 1,239 (Rs 1,268). Such transfer represents the amount equivalent to the
additional charge necessitated on account of revaluation of certain fixed assets referred to in (a) (ii)
above, being the difference between the depreciation charged and the depreciation calculated in
accordance with the rates followed by the Company on such items not revalued.
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
(o) Depreciation charge for the year includes an amount of Rs. 5,323 (Rs. 5,943) provided for on an
accelerated basis in respect of a category of equipment due for replacement as per technical
assessment by the management.
(p) In accordance with Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent
Assets“, the movement of provisions is detailed below:
(Rs '000)
Description
(i) Product Replacement
Loss (a)
Others (b)
(i) Price differential
pending settlement**
Balance as on
January 1, 2010
13,842
Additions during
the year
2,494*
Utilized/Reversed Balance as on
during the year
December 31, 2010
-
16,336
47,392
-
47,392
-
(ii) Custom/Excise/
Additional Excise Duty
39,029
-
964
38,065
(iii) Sales tax/ Entry tax
20,445
1,000
18,107
3,338
Total (b)
106,866
1,000
66,463
41,403
Total (a)+(b)
120,708
3,494
66,463
57,739
Previous Year
(146,973)
(4,002)
(30,267)
(120,708)
* Net of utilisation / reversals during the year.
** Based on legal opinion, the Company has reversed the provision and considered the same as contingent
liability.
The above provision represents the estimated outflow in respect of the above items. However, considering the
nature of items, the uncertainty and timing relating to these outflows cannot be estimated.
(q) Leases:
Cancellable : The Company's cancellable operating lease arrangement mainly consists of residential
premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease
include terms for renewal, increase in rents in future periods and terms of cancellation.
Non Cancellable : The company has entered into a non cancellable Operating lease for office
premises, the schedule of future minimum lease payment which is set out below:
Particulars
Not later than one year
Later than one year but not later than five years
Later than 5 years
December 31, 2010
(Rs.'000)
21,988
97,710
79,371
December 31,2009
(Rs.'000)
21,988
94,229
104,840
70
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
(r) Earnings per Share calculations:
Profit for the year (Rs.'000)
No. of equity shares of Rs. 10/- each
Basic and diluted earnings per share (Rs.)
For the year ended
December 31, 2010
(Rs.'000)
748,111
23,066,507
32.43
For the year ended
December 31, 2009
(Rs.'000)
730,942
23,066,507
31.69
(s) The management is of the opinion that its international transactions with associated enterprises have
been undertaken at arms' length basis at duly negotiated prices on usual commercial terms. The
Company has submitted the Accountant's Report in form 3CEB upto the financial year ended on
March 31, 2010 as required under section 92E of the Income Tax Act, 1961. In respect of the proposed
transfer pricing adjustments suggested by the Assessing Officers in the Assessments already
completed, the matters are pending before the Appellate Authorities / Dispute Resolution Panel.
Based on expert opinion the management is of the view that in all likelihood there will be no material
liability.
(t) Disclosures under the Micro, Small & Medium Enterprise Development Act, 2006 (as amended in
Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007) based on the
information available with the company:
i)
ii)
iii)
iv)
v)
Delayed payments due as at the end of accounting year on account of Principal - Rs. Nil (Nil) and Interest due
thereon - Rs. Nil (Nil)
Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (Nil)
Interest due on principal amounts paid beyond the due date during the year but without the interest
amounts under this Act - Rs. Nil (Nil)
Interest accrued but not due - Rs. Nil (Nil)
Total Interest Due but not paid - Rs. Nil (Nil)
(u) During the year Goodyear Orient Company Private Limited, a wholly owned subsidiary of the
promoter, The Goodyear Tire & Rubber Company, invited bids by way of public announcement dated
May 13, 2010, to acquire, in accordance with the Securities and Exchange Board of India (Delisting of
Equity Shares) Regulations, 2009 (“Delisting Regulations”) and terms and conditions set out in the
Public Announcement, up to 5,997,292 equity shares of the company, representing 26% of the equity
capital (the “Offer Shares”) for which the approval was obtained from shareholders by way of postal
ballot.
The number of Offer Shares tendered by the public shareholders at or below the discovered price was less than
the minimum number of Offer Shares required to be accepted for the delisting offer to be successful in terms of
Delisting Regulations. Accordingly, the delisting offer is deemed to have failed in terms of the Delisting
Regulations.
(v) In accordance with AS-15 (revised) "Employee Benefits", the Company has calculated the various
benefits provided to employees as under:
71
A. Defined Contribution Plans
a) Superannuation Fund
b) Provident Fund
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
During the year the Company has recognised the following amounts in the Profit and Loss account: For the year ended
December 31, 2010
(Rs.'000)
Employer's Contribution to Superannuation Fund*
Employer's Contribution to Provident Fund*
For the year ended
December 31, 2009
(Rs.'000)
7,050
19,070
11,216
17,293
B. State Plans
a) Employer's contribution to Employee State Insurance.
b) Employer's contribution to Employee's Pension Scheme 1995.*
During the year, the company has recognised the following amounts in the Profit and Loss account: For the year ended
December 31, 2010
(Rs.'000)
Employer's contribution to Employees State Insurance
Employer's contribution to Employees Pension Scheme*
For the year ended
December 31, 2009
(Rs.'000)
1,190
6,460
837
6,200
* Included in 'contribution to provident and other funds' under manufacturing, selling and administrative expenses (Refer
schedule 13)
C. Defined Benefit Plans
a) Gratuity
b) Leave Encashment / Compensated Absence
c) Employers Contribution to Provident Fund (shortfall in interest on Provident Fund balance).
In accordance with Accounting Standard 15, an actuarial valuation was carried out in respect of the aforesaid defined
benefit plans based on the following assumptions.
Leave Encashment/
Compensated
Absence
Gratuity
Interest on
Provident Fund
Balance
For the year ended
For the year ended
For the year ended
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2010
Discount Rate (per annum)
7.75%
Rate of increase in compensation level
5.00%
Expected rate of return on planned assets
N.A.
7.50%
5.00%
N.A.
7.75%
5.00%
N.A.
7.50%
5.00%
N.A.
7.25%
N.A.
7.25%
Dec. 31, 2009
7.50%
N.A.
7.50%
72
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
SCHEDULES TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
Amount of obligation as at the year end is determined as under :
Leave Encashment/
Compensated
Absence
For the year ended
(Rs '000)
Interest on
Provident Fund
Balance
Gratuity
For the year ended
For the year ended
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2010
24,501
23,995
96,005
94,471
3,731
3,432
1,573
8,730
(13,035)
6,398
28,167
1,493
9,438
(13,315)
2,890
24,501
7,372
5,429
(10,609)
3,776
101,973
7,048
6,224
(14,056)
2,318
96,005
1,102
4,833
299
3,731
Present value obligation as
at the beginning of year
Interest cost
Current service cost
Benefits Paid
Actuarial (gain) / loss on Obligations
Present value obligation as
at the end of year
Dec. 31, 2009
Dec. 31, 2010
Dec. 31, 2009
Amount of the obligation recognised in the Balance Sheet
Leave Encashment/
Compensated
Absence
Gratuity
As at
As at
Dec. 31, 2010
Present value obligation at the
28,167
end of the Period
Fair Value of Plan Assets at end of period
Liability recognised in the Balance Sheet 28,167
Dec. 31, 2009
Dec. 31, 2010
(Rs '000)
Interest on
Provident Fund
Balance
As at
Dec. 31, 2009
Dec. 31, 2010
Dec. 31, 2009
24,501
101,973
96,005
4,833
3,731
24,501
101,973
96,005
4,833
3,731
Amounts pertaining to defined benefit plan are as under :
73
Gratuity
Present value obligation as at the year
end
Fair Value of Plan Assets at the year end
Surplus / (Deficit)
Experience Adjustment on plan
liabilities (loss) / gain
Adjustment due to change in
assumption on plan liabilities (loss) / Gain
As at
Dec. 31, 2010
As at
Dec. 31, 2009
As at
Dec. 31, 2008
As at
Dec. 31, 2007
101,973
(101,973)
96,005
(96,005)
94,471
(94,471)
85,962
(85,962)
(3,022)
(2,318)
(2,675)
399
(754)
-
-
-
Leave Encashment
Present value obligation as at the
year end
Fair Value of Plan Assets at the year end
Surplus / (Deficit)
Experience Adjustment on plan
liabilities (loss) / gain
Adjustment due to change in
assumption on plan liabilities (loss) / Gain
As at
Dec. 31, 2010
As at
Dec. 31, 2009
As at
Dec. 31, 2008
As at
Dec. 31, 2007
28,167
(28,167)
24,501
(24,501)
23,995
(23,995)
23,601
(23,601)
(5,163)
(2,890)
(4,506)
(3,027)
(1,235)
-
-
-
Expenses Recognised in Profit and Loss Account
Leave Encashment/
Compensated
Absence**
For the year ended
Dec. 31, 2010
Current service cost
Interest cost
Net Actuarial (gain) / loss
recognised during the year
Total expense recognised
in Profit and Loss Account
Dec. 31, 2009
(Rs '000)
Interest on
Provident Fund
Balance***
Gratuity**
For the year ended
Dec. 31, 2010
Dec. 31, 2009
For the year ended
Dec. 31, 2010
Dec. 31, 2009
8,730
1,573
6,398
9,438
1,493
2,890
5,429
7,372
3,776
6,224
7,048
2,318
1,102
-
299
-
16,701
13,821
16,577
15,590
1,102
299
** Refer 'Leave Encashment' and 'Gratuity' under manufacturing, selling and administrative exenses (Refer schedule
13)
*** Included in 'Miscellaneous' under manufacturing, selling and administrative expenses (Refer schedule 13)
Best estimate of contribution during next year for Gratuity is Rs.12,497 (Rs.21,926), and for leave encashment is Rs.
4,008 (Rs.3,227)
(w) Stock and book debts are subject to a maximum charge of Rs. 350,000 (Rs. 350,000) for all credit
facilities / guarantees sanctioned by BNP Paribas Bank.
(x) Previous year figures have been regrouped and recast, wherever necessary, to make them
comparable to those of the current year. Figures in brackets, wherever given are in respect of
previous year unless stated otherwise.
(y) All the figures are in rupee thousand unless stated otherwise.
For Price Waterhouse
Firm Registration Number :301112E
Chartered Accountants
Pierre E. Cohade Rajeev Anand
Vice Chairman &
Chairman
Managing Director
Yashwant Singh Yadav
Director
R V Gupta
Director
H.Singh
Partner
Membership No. F-86994
C Dasgupta
Director
Jean Philippe Lecerf
Chief Financial officer
Pankaj Gupta
Company Secretary
Place: Aurangabad
Date: February 21, 2011
74
Rajiv Lochan Jain
Director
GOODYEAR ANNUAL REPORT 2010
WHEEL OF FORTUNES
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
(AS PER SCHEDULE VI, PART (IV) OF THE COMPANIES ACT, 1956)
i) REGISTRATION DETAILS
Registration No.
State Code
Balance Sheet Date
8,578
05
31st December, 2010
ii) CAPITAL RAISED DURING THE YEAR (Amount in Rs. thousands)
Public Issue
Rights Issue
Private Placement
Bonus Issue
NIL
NIL
NIL
NIL
iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. thousands)
Total Liabilities
Total Assets
2,809,309
2,809,309
SOURCES OF FUNDS
Paid-up capital
Reserves and surplus
Unsecured loans
230,665
2,476,884
-
APPLICATION OF FUNDS
Net fixed assets
Investments
Net current assets
Misc. expenditure
Accumulated losses
1,979,803
829,506
-
iv) PERFORMANCE OF THE COMPANY(Amount in Rs. thousands)
13,143,325
12,034,074
1,109,251
748,111
32.43
70%
Turnover including other incomes
Total expenditure
Profit before tax
Profit after tax
Earning Per Share (Rs.)
Dividend rate (%)
v) GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY
75
ITEM CODE NO.
4011
4012
4013
PRODUCT DESCRIPTION
Automotive Tyres
Flaps
Tubes
Place: Aurangabad
Date: February 21, 2011
Pierre E. Cohade
Chairman
Rajeev Anand
Vice Chairman &
Managing Director
Yashwant Singh Yadav
Director
R V Gupta
Director
C Dasgupta
Director
Rajiv Lochan Jain
Director
Jean Philippe Lecerf
Chief Financial Officer
Pankaj Gupta
Company Secretary
ON THE HUNT FOR DINOSAURS
In 2010, Earth Trek ventured through the Queensland
arid outback to document the Australian Age of
Dinosaurs. The Toyota Hilux expedition vehicle covered
over 10,000 kilometres on bitumen, shale, gravel, sand
and gibbers on Goodyear Wrangler DuraTrac tyres.
www.goodyear.co.in
,